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Boeing’s latest 777 orders won’t save program from further cuts: Analyst

Though a recent headline-winning order from Qatar Airways is a bright spot for the Boeing Co.’s 777 in 2016, sales still aren’t adding up to the kind of numbers that would keep the wide-body jet program from likely further cuts to its production rate.

Such cuts would have an impact in Wichita, where Spirit AeroSystems Inc. builds the forward fuselage and other components on the 777.

Aviation analyst Scott Hamilton wrote on his Leeham News website this week that while the Qatar order for 10 777-300ER aircraft is certainly welcome, it only pushed the order total for the aircraft to 16 for the year.

That’s well under Boeing’s (NYSE: BA) goal of selling between 40 and 50 of the aircraft in 2016.

With orders for the current 777 model still slow, Hamilton writes that most analysts see an additional production cut coming as it begins to bridge the gap to the 777X toward the end of the decade.

Boeing earlier this year announced plans to slow production from 8.3 of the aircraft per month to seven per month next year.

However, Hamilton writes, many expect that rate to drop to as low as four per month, with Morgan Stanley’s projection even lower at 3.5 of the aircraft per month.


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