Contract Dispute Forces Boeing To Scrap 747-8 First Delivery Ceremonies

AIN Air Transport Perspective » September 19, 2011
The first 747-8F destined for Cargolux will remain in Everett, Wash., for an
The first 747-8F destined for Cargolux will remain in Everett, Wash., for an indeterminate time while Boeing and the type’s launch customer try to settle contractual differences.
September 19, 2011, 10:35 AM

“Unresolved contractual issues” have forced Boeing to delay or possibly cancel delivery of the first two 747-8 Freighters to Cargolux, originally scheduled for today and Wednesday. The rejection of the deliveries by the Luxembourg-based cargo carrier comes as an embarrassment for Boeing, which had planned to hold special ceremonies this week in Everett, Wash., to mark the milestone following some two years of delays caused by design changes and certain flight test “discoveries.” Of course, the delays have already forced Boeing to pay untold millions of dollars in compensation for late deliveries.

Asked for detailed comment on the reasons for the change in plans, a Boeing spokesman referred AIN to Cargolux. The airline, too, simply cited unresolved contractual “issues” in a statement issued on Saturday. However, it also noted that if the sides cannot reach a satisfactory settlement, the airline “will source alternative capacity to fully meet customer demand and expectations ahead of the traditional high season.”

Cargolux holds a firm order for 13 of the latest version of the Boeing jumbo jet, but can apparently refuse to honor the original contract due to Boeing’s failure to meet its delivery schedule guarantees.

The carrier has placed a hold on the financing of the two airplanes, secured through J.P. Morgan as an Ex-Im Bank guaranteed lender, pending resolution of the contractual “issues,” said Cargolux.

A 747-8 program spokesman told AIN that negotiations with Cargolux continue and that the company hopes to deliver the airplanes “soon.” He could not reveal the identity of the next customer in line to take deliveries of the Freighter, citing a need for permission from the respective airlines–something he said Boeing is now working to obtain.  

 

 

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