Per major media sources, The Boeing Company (NYSE:BA) BA is likely to discontinue the production of its once-iconic 747 jumbo jets on account of poor orders, intense pricing pressure and the impacts of the coronavirus pandemic. Per a Bloomberg report, the final 747-8 jets will be rolled out of a Seattle area factory in about two years’ time.
Decline in Popularity of 747 Jumbo Jets
Over the years, the popularity of the 747 Jumbo Jets hasbeen shrinking, and as a result, has almost been phased out by airline companies across the globe. Some major airliner companies that have already discontinued the 747 fleets are Delta Air Lines (NYSE:DAL) DAL, United Airlines UAL, KLM Royal Dutch Airlines and Qantas.
These jets have gradually been replaced by other modern variants of Boeing’s jets such as the 777 and 787 and Airbus’ EADSY (OTC:EADSY) A330 and A350 jets, as they are comparatively low in costs, nimble, more fuel-efficient and effective during long-haul operations. Gradually, airline companies have resorted to narrow-body aircraft, which are easier to maintain and burn less fuel, thereby saving thousands of dollars per flight.
Back in 2016, for the first time, Boeing revealed its intentions of ending 747 productions amid falling orders and intense pricing pressure. Per Jefferies (NYSE:JEF), the companylost about $40 million for each 747 since 2016, when it cut down onproduction to making just six jets a year. Notably, in March 2019, Boeing unveiled its 777X prototype, which would serve as itsnew flagship jet and alsothe replacement for the iconic 747 aircraft.
Our View
In recent times, Boeing witnessed a consistent struggle due to a significant drop in aircraft deliveries. As airline companies all over the world are battling the effects of the pandemic, a prolonged halt in purchase is inevitable. Due to such a worldwide crisis, the aviation industry on a whole has taken a nasty hit and thus is resorting to effective cost-saving measures and options. In this case, the decision of discontinuing 747 jet productions seems wise, since the aircraft giant is already incurring huge losses for this program and other airliners that have still 747 in their fleet are retiring them at a rapid pace.
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