mushroom
It's pronounced Doo-MAH
- Joined
- Aug 22, 2005
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From the Wall Street Journal:
By DAVID KESMODEL
Boeing Co. suffered another setback Wednesday as Atlas Air Worldwide Holdings Inc. canceled delivery of the first three of Boeing's new 747-8 freighters that it has on order.
The move by Atlas Air comes less than a week after Luxembourg's Cargolux Airlines International SA called off plans to take the first delivery of the jumbo cargo jet, scuttling plans for a big celebration by Boeing in Everett, Wash.
Atlas Air Worldwide, which operates freighters through its aviation subsidiaries, said it exercised termination rights for three early-production 747-8 cargo planes because of "delays and performance considerations."
The company originally ordered 12 of the jets in September 2006, and now expects to receive three of the planes this year, four in 2012 and two in 2013.
"As prudent asset managers, terminating the first three aircraft was the right decision for our fleet, our customers and our stockholders," William J. Flynn, chief executive of Atlas Air Worldwide, said in a news release. "We expect the remaining 747-8Fs in our order to be better-performing aircraft than those we have terminated."
Boeing spokesman Jim Proulx declined to comment on Atlas Air's decision. He said the "first airplanes off the line will be nominally short of initial expectation," but will still be more efficient to operate than previous jet models in its class.
Even before the developments over the past week, Boeing's 747-8 project had struggled. The massive jet—18 feet longer than its predecessor, the popular 747-400—was beset with production and design issues. Chicago-based Boeing already took a write-down on the 747-8 project, and the planned delivery to Cargolux was two years behind schedule.
Cargolux called off plans to take delivery of two of the planes, which come with General Electric Co. engines, this week. The company and Boeing said the dispute is over contractual issues. The two sides continue to talk, and it is possible Cargolux will take deliveries in the near future.
It's not unusual for the first units of new aircraft to fall short of airlines' expectations, and it's one reason why manufacturers offer steep discounts to early buyers.
The first units of new airplanes often weigh more than initial specifications and are plagued with glitches as the plane maker wrings out design problems.
People in the aviation industry have said over the past week that the early 747-8 jets were consuming fuel at a higher rate than Boeing's initial specifications.
Write to David Kesmodel at david.kesmodel@wsj.com
