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Originally published January 9, 2009 at 12:00 AM | Page modified January 9, 2009 at 12:18 PM

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Strike, supplier problems cause Boeing to deliver 100 fewer jets last year than expected

Boeing finally got production in its airplane factories back on track in December, delivering 41 commercial jets in the last month of the year, after just four deliveries in November.

Seattle Times aerospace reporter

It took a full month after the end of the crippling Machinists strike, but Boeing finally got production in its airplane factories back on track in December.

Figures released Thursday show Boeing delivered 41 jets from its Puget Sound-area factories in the last month of the year, after just four deliveries in November.

The strike ended Nov. 2, but Boeing struggled afterward to get production going in part because thousands of defective parts — called nutplates — had to be replaced on dozens of airplanes already partly assembled.

Due to the two-month strike and those supply-chain problems, Boeing delivered 375 jets, 100 fewer than planned in 2008.

Meanwhile, orders tumbled from last year's record high as the aviation business entered a cyclical downturn, the looming recession curtailed airline spending plans, and Boeing's new airplane programs faced delays.

Sales figures for the year, also released Thursday, showed 662 net orders. The total list price value is about $71 billion. With standard industry discounts, the actual market value estimated by airplane-valuation firm Avitas is about $44 billion.

That's down from 1,413 net orders in 2007, worth $171 billion at list prices or an Avitas-estimated actual value of about $106 billion.

The value of the orders declined even more steeply than the absolute sales figures because the proportion of expensive wide-bodies was much higher in 2007's order total.

For example, Boeing won 369 orders for its 787 Dreamliner in 2007, but only 93 in 2008.

That decline is not a surprise, given that airlines have ordered more than 900 of the Dreamliners to date and must wait two years or more beyond their expected delivery date for the much-delayed plane.

It's likely that 787 orders will not rise sharply again until after 2010, when production should be in full swing and airlines will have a chance to see its performance in service.

Boeing rival Airbus will not release its year-end sales and delivery figures until later this month, but it is already assured of winning the sales race in 2008, the first time since 2005.

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By the end of November, the European plane maker had already surpassed Boeing's full-year order total, with 756 net orders. Airbus executives said then they expected to win more than 850 new orders and to deliver more than 470 jets in 2008.

Again, this is not surprising because Airbus' new airplane program, the A350, is approaching its peak order phase, while Boeing's Dreamliner has already moved past that into a slower sales cycle. The A350 garnered 163 net orders through November.

One particularly bright spot for Airbus is that sales of the mid-size A330, which will eventually be replaced by the A350, are holding up much better than expected.

Airbus sold 137 of the A330s through November. Boeing sold just 28 of the similar-sized 767.

Because Boeing won more orders than it delivered, its order backlog continues to grow. It now has more than 3,700 jets on order.

In a statement, Boeing Commercial Airplanes Chief Executive Scott Carson portrayed the huge backlog as a solid basis for confidence in the future and said the company must focus on overcoming recent production delays and delivering on those orders.

"With a balanced base of customers from all regions of the world, from airlines with varied business models, and with strong orders across our product line, we are now focused on executing this strong backlog position," Carson said.

However, many industry analysts predict that as the recession bites, the order book will shrink significantly through cancellations.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

Copyright © 2009 The Seattle Times Company

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