Boeing has decided to cut production of its 747-8 jumbo jet in half and take a charge of $569 million in its fourth quarter.
Starting in September the world’s biggest plane maker will slow the production rate to 6 planes a year from 12.
The four-engined plane is being overtaken in popularity by twin-engined craft which are more fuel efficient.
However, the 747 will still be used for the Air Force One presidential fleet, which is due to be upgraded.
Boeing shares dipped shortly after the announcement but in Friday trading are up almost 2%.
In recent years the 747 has been more popular as a cargo plane, rather than a passenger jet.
Production had already fallen in March of this year to one aircraft a month, from 1.3.
Ray Conner, chief executive of
Boeing Commercial Airplanes CEO Ray Conner said in a statement: “The air cargo market recovery that began in late 2013 has stalled in recent months and slowed demand for the 747-8 freighter.”
The company said global passenger traffic and demand remained strong.
Boeing and European rival Airbus delivered record craft in 2015.
However, despite the record deliveries, new orders fell by half last year.
Boeing is ramping up production of its 787 Dreamliner, built largely with lightweight composite materials that reduce fuel use.
Dreamliner production will rise from the current 10 per month rate to 14, by 2020.