Boeing loses four freighter orders as cargo market weakens

Production of Boeing's jumbo jetliners goes on as planned despite the cancelation of freighter orders from Japan's biggest cargo carrier.

The Chicago-based planemaker has lost orders for four 747-8 freighters from Nippon Cargo Airlines Ltd., but it will have "no impact on production rates," Boeing spokesperson Doug Alder told Reuters.

The cancelation was made on September 1 amid falling demand for Boeing's iconic double-decker planes.

Although Nippon Cargo still has two 747-8 freighters on order, Bloomberg reports the loss means Boeing has no net orders for the jumbo jetliners this year.

A 747-8 freighter, which is the latest model of Boeing's jumbo jet, costs $379.1 million. It is the planemaker's second most expensive aircraft, next to the 777-9, which costs $400 million. The freighter has made up the majority of 747 purchases.

In response to weak demand, Boeing is cutting this September the monthly output for the 747-8 from 1.5 to 1.3, according to the Wall Street Journal. This is the company's third production cut since 2013.

Boeing is not alone in its predicament. Its rival Airbus also has not received orders for its A380 since 2014 from commercial airlines. Both the 747 and A380 have four engines and are not as fuel-efficient as long-range twin-engine planes, making them less attractive to airlines.

Also, global freight traffic in July dropped 0.7% from a year earlier, while freight capacity has increased, raising fears of further weakness in air cargo ahead.

"The disappointing July freight performance is symptomatic of a broader slowdown in economic growth," said Tony Tyler, Director General of the International Air Transport Association.

Boeing had expected a recovery in cargo traffic earlier this year following years of weakness since the 2008 financial crisis.

Its sales prospects may still improve though, based on interest from other carriers. Atlas Air Worldwide Holdings Inc., the world's third-largest operator of the 747-8 freighter, said it might get more planes from Boeing after ordering one earlier this year. "It's an excellent aircraft. ... I do think there will be additional orders of [747]-8s," Atlas Air CEO William J. Flynn told the Wall Street Journal.

In June, a Russian air cargo airline made a commitment to purchase 20 747-8s from Boeing. The US Air Force also said it would buy, though it is not clear how many. Both commitments have yet to translate into firm orders.