The international airfreight sector has struggled since 2008, but Boeing thought market demand would rise this year as it prepared for a production rate bump in the 747-8, the world's best-selling large freighter. Unfortunately, recovery in Asia, Europe and North America is now unlikely until 2014.

Boeing's market forecasters still expect freighter demand to more than double over the next 20 years, rising an average of 5.2% per year. That should push orders to 3,200 from the current level of 1,750, giving a big boost to the 747, which hold a 55% market share.

But high fuel prices, political and economic turmoil—such as the Arab Spring and European debt crisis—and sluggish growth in China and Asia are hurting markets now, says Boeing's cargo analyst, Tom Crabtree. Though the 747-8 Freighter offers a 17% fuel advantage over the 747-400, cargo companies have been parking freighters for lack of work. The cool freight market has raised alarms on the 747-8 assembly line.

“We're in a bit of a quandary on how to smooth out our production system,” says Boeing Senior Vice President Pat Shanahan.

Despite the weak freight market, Boeing moved to a two-per-month build rate in July. As of Nov. 28, it had delivered 27 747-8s this year, including six VIP versions and the first four of 20 Intercontinental passenger models for Lufthansa. Of its 79 aircraft in backlog, 46 are freighters. It has manufactured 50 747-8s but delivered only 36.

While freight remains a “watch and see” item for Boeing, it is counting on passenger aircraft campaigns in 2013 to help smooth out the 747-8 order mix, Shanahan told an RBC Capital Markets teleconference last week. But given their longer lead times, even a burst of passenger aircraft orders cannot plump up the 747 build rate until 2015 or 2016. “We're going to have to hold our breath through this period [2013] with a mixture of passenger sales and moving ahead some of the [other] deliveries to smooth out the production line,” he said.

Still, Boeing expects to meet its goal of delivering 70-85 747-8s and 787s in roughly equal numbers this year.

Despite the 747 slowdown, Shanahan offered an upbeat assessment of meeting the highest build rates ever for 737s, 777s and 787s in 2014 (see timeline). “This has been an extraordinarily busy year,” Shanahan says. “Broadly speaking, in January we will start our sixth rate increase in the past 12 months.”

While development of the 787-9 and 737 MAX programs are on schedule, the company is clearly approaching proposals for new aircraft cautiously. The most visible is the 787-10X, a high-density stretched version of the 787-9. Assembly of the -9 is expected to start in March.

No official authority to offer has been announced for the -10X, but officials familiar with the program tell Aviation Week the decision has been made. A formal launch is expected in the second or third quarter of 2013. Theoretically, that schedule could bring the 787-10X to the market in 2015-16. But 787 General Manager Larry Loftis emphasizes a go-slow approach to the still unofficial aircraft. “We're looking at the back end of this decade,” he says.

The -10X involves more than adding fuselage plugs to the 787-9. There are indications that a redesign of the infamous side-of-body join, where composite delamination issues caused delay for the 787-8, will be needed to accommodate the stretched aircraft's greater loads. A redesign also offers the promise of improved performance in the wing. An upgraded environmental control system is likely, as is a stronger main landing gear that uses six-wheel trucks, as does the 777-300ER.

A slower development pace undoubtedly takes into account the workload Boeing already has underway and the production problems it encountered in developing the 787 and 747-8 concurrently. While the -10X and 777X are important, Boeing cannot afford a slip-up in the 737 MAX, as Airbus is developing a reengined rival in the A320NEO.

Besides its continuing rate buildups, Boeing also is turning 767-2Cs into U.S. Air Force KC-46A tankers (see p. 30). Some 777 operators are eager for an immediate launch of the 777X, but Boeing is holding off. It says the proposed aircraft will not be ready for them until the end of the decade at the earliest. Airbus's 777-300ER rival, the A350-1000, is set to enter service in 2017.