MIAMI — In September 2016, Boeing will adjust the production rate of its 747-8 to six aircraft per year, and will recognize a $569 million after-tax charge as near-term demand has decreased. The company previously announced that the rate would drop from 1.3 to one per month to one in March 2016.

Since its launch in 1969, the Boeing 747 led the Very Large Aircraft market segment for decades. However, its dominance in the recent years has been challenged by twin engine widebodies, relegating the passenger operations to a handful operators and cargo, where it has found a predominant use given its capacity.

Boeing 747-8I Assembly Line. (Credits: Boeing)

“The air cargo market recovery that began in late 2013 has stalled in recent months and slowed demand for the 747-8 Freighter,” said Ray Conner, Boeing vice chairman and president and CEO of Boeing Commercial Airplanes. “While we remain confident in the 747-8’s unique value-proposition and an upcoming replacement cycle for late-model 747-400 Freighters, we’re taking the prudent step to further align production with current market requirements.”

According to the most recent Boeing orders and deliveries information, Boeing has a backlog for seven 747-8 freighters and 13 747-8 passenger aircraft. The number includes orders for four 747-8s for defunct Russian carrier Transaero, and two for Nigerian carrier Arik Air, which might not take delivery of these given its current financial condition.

“We are closely monitoring the air cargo market as we work to win additional orders to support ongoing future production. At the same time, we continue to aggressively drive productivity to lower costs across our production system to offset the current market challenges,” said Greg Smith, executive vice president of Business Development & Strategy and chief financial officer.