Last week Boeing filed for building permits in South Carolina, with Gov. Chris Gregoire seemingly resigned to the fact that Dreamliner production may eventually fly east. Now today comes a one-two punch of more bad news.
Just as demand is decreasing for its 747, so too is the cost to make it. It doesn't take an MBA to add up that equation, and the result is a $1 billion hit to earnings. But wait, there's more!Industry experts now predict that 2010 is going to be a doozy for Boeing and Airbus. The jetmakers will have to scale back production of their smaller money-makers (ya know, seeing as how we're in a global recession and all) which in turn will lead to less cash for the big boys. A sampling of the Times doomsday quotes:
"We're moving ever closer to the rendezvous with reality," said Chris Tarry, a London-based aviation analyst who has followed the industry for more than 20 years. "The reality is, there's too much capacity."
"It's going to be an extremely tough winter for airlines," said industry analyst Richard Aboulafia of the Teal Group. "Airlines already sold everything that's not nailed down to raise cash."