About the Boeing 747
February 9, 2016, saw Boeing (BA) celebrate its 47th anniversary of the Boeing 747’s maiden voyage. The 747 was arguably the most iconic jet of the 20th century, as it was the world’s first wide-body airliner. The 747 was designed to carry up to 660 passengers, depending on its configuration.
The jet was a bold move by Boeing, as the world’s largest, widest, and most technically advanced airliner. It was also a huge commercial risk that later went on to change the face of the entire tourism industry. Its economic design helped place international travel within the reach of middle-class vacationers rather than just the affluent.
The 747 starts to fade away
Boeing has delivered more than 1500 747s since its first flight in 1969. However, the industry has moved on to building newer and more efficient aircraft with smaller engines that can land at smaller airports. Also, the industry’s tendency to use retired passenger planes for freight has reduced Boeing’s remaining 747 order book to just 20.
This resulted in the company reducing its manufacturing rate to just six a year after it reported an after-tax loss of $569 million. The company also said that it has recorded several accounting losses totaling $2.6 billion for the 747-8 program.
Air Force One
Boeing (BA) needs to keep 747s in production through 2019. Boeing received an order for two 747-8s to replace the Boeing 747-200s currently serving as Air Force One. Although Boeing personnel are hopeful of a possible resurgence late this decade for the 747 freighter, whose size and cargo-loading capabilities are unmatched, the order book does not reflect this aspiration. However, the original jumbo jet will always be the aircraft that made Boeing into the global leader it is today.
Boeing is the largest commercial jet manufacturer in the US and is the world’s second-largest manufacturer behind Airbus. It is also the second-largest defense contractor in the US behind Lockheed Martin (LMT), and it is followed by Raytheon (RTN), General Dynamics (GD), and Northrop Grumman (NOC). Boeing forms ~5.7% of the Dow Jones Industrial Average ETF’s (DIA) portfolio.