Boeing to Cut 4,500 Jobs (Update)

Updated from 2:08 p.m. EST

The slowing economy has caught up with Boeing(BA Quote), which saw 2008 orders decline by 53% and now says it will cut 4,500 jobs this year.

Despite the slowdown, Boeing still has a backlog of 3,700 aircraft, so the principal question facing the aircraft maker -- and the largest U.S. exporter -- is whether the orders hold up.

"With a balanced base of customers from all regions of the world, from airlines with varied business models, and with strong orders across our product line, we are now focused on executing this strong backlog position," Scott Carson, CEO of Boeing Commercial Airplanes, said Thursday, in a prepared statement.

However, in a report Friday, CreditSights noted that Boeing is facing "weak demand for air travel and uncertainty surrounding the availability of aircraft financing."

Global airline traffic is forecast to fall by 3% this year, only the second decline in 35 years, according to a recent report by the International Air Transport Association. IATA says it will be 2011 before global traffic growth is again above 4%. Moreover, the group is forecasting a slump so deep that even in 2016, passenger traffic will be 9% lower than earlier forecasts had indicated.

"As consumer confidence remains low, demand for air travel will continue to come under pressure and as a result airlines are adjusting their fleet expansion and growth strategies," according to Credit Sights.

Boeing shares traded Thursday afternoon at $44.59, down 20 cents. After reaching a high of $107.83 in July 2007, the shares tumbled to as low as $36.17 in November 2009.