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SEATTLE (Reuters) - Boeing Co (BA.N) said on Wednesday it would slow production of its 747-8 jumbo jet by 23 percent to one per month starting in March, an effort to keep the production line running amid sluggish demand for the iconic, humped-top plane.
Boeing, the world's largest plane maker, is currently building 747s at a rate of 1.5 a month and had already announced plans to reduce the rate to 1.3 a month from September.
The company said the decision to slow production further was not related to Tuesday's announcement that President Dennis Muilenburg will succeed Jim McNerney as chief executive on July 1.
Boeing had been widely expected to slow production of its biggest plane in response to weakness in the cargo market. Those concerns were eased last week when Russia cargo airline Volga-Dnepr Group committed to buying 20 747s.
The U.S. Air Force said earlier this year that it would buy an unspecified number of 747s to update the Air Force One presidential fleet, also boosting the jet's prospects.
But last year Boeing logged no net 747 orders, setting up 2015 as a make-or-break year for the plane that was developed in the late 1960s.
Earlier this month, Boeing cut by 13 percent its long-range forecast for large wide-body aircraft, a category that includes its 747 and the Airbus (AIR.PA) A380.
Boeing expects 540 of these planes will be needed over the next 20 years, down from 620 it forecast in 2014.
According to latest data, Boeing had only 32 orders on its books through May for the 747, which costs just under $370 million at list price.
"With recent orders and commitments, along with these changes announced today, we anticipate a stable future for the 747 production system," Bruce Dickinson, vice president and general manager of the 747 program, said in an internal company report on Wednesday.
The 747 has become a workhorse for air freight companies and is appreciated for its large capacity that allows it to carry long cargo such as pipe segments.
Even though the cargo market is recovering, the "overcapacity of freighters in the market" has prompted Boeing to slow production, Dickinson said.
Airbus, also struggling to sell its double-decker A380, is considering revamping the jet with new, more efficient engines – a decision that could come later this year if it can find enough customers.
Boeing's shares closed down a shade under 1 percent at $143.
Editing by Savio D'Souza