Is the end in sight for the 747 — Part III

Cargolux was the launch customer for the 747-8F. Will it order more?

Today we conclude our three-part look at the future of Boeing’s 747 progam. In Part I we looked at the almost-fifty-year history of the 747, and noted Boeing’s warning that unless orders pick up, it is “reasonably possible that we could decide to end production of the 747.” Until recently, Boeing has said it believed there would be a resurgence of interest in the 747-8F in 2019, when carriers would begin replacing aging 747-400Fs with new -8Fs. Yesterday, in Part II, we began a carrier-by-carrier analysis of the thirty-three airlines currently operating 747-400Fs. We eliminated twenty-six because we felt they either could not afford 747-8Fs, had committed to refleeting with 777Fs, or already had all the 747-8Fs they were likely to need.

China Airlines has nineteen aging 747-400Fs. Will it choose the 747-8F as a replacement?

China Airlines has nineteen aging 747-400Fs. Will it choose the 747-8F as a replacement?

This leaves us with seven 747-400 freighter operators that are potential customers for more 747-8Fs

  • Asiana: Cargo Facts believes Asiana was very close to a firm order for four 747-8Fs, but backed out at the last minute. A future order is possible.
  • Atlas Air Worldwide Holdings: Atlas is certainly a candidate. It already operates ten 747-8Fs, and will eventually have to replace its large 747-400F fleet. The company has recently moved into 777F operation, but a further 747-8F order is possible.
  • Cargolux: Like Atlas, Cargolux is already a 747-8F operator, and has some -400Fs that will eventually be retired. A further -8F order is possible, particularly if the Cargolux China joint venture is successful.
  • China Airlines: CAL is a potential candidate. It has a relatively old 747-400F fleet (19 units of 2000 to 2006 vintage), and will have to make a decision on replacement before too long. We point out, however, that CAL’s traffic has been falling steeply in recent years, and there will be no one-for-one replacement.
  • Saudia Cargo: The Saudi Arabian government recently imposed a 20-year age limit on all aircraft, but while Saudia has acquired two 747-8Fs and four 777Fs, it generally relies on ACMI-leased lift for its maindeck operations, and a future 747-8F order, while possible, would be surprising.
  • Silk Way West Airlines: The scheduled service arm of the Silk Way group operates three 747-8Fs and has another two on order. An additional order seems unlikely, but even if it did happen, it would likely be for just one or two freighters.
  • UPS: UPS operates thirteen 747-400 freighters, and could replace some, or all, of them with -8Fs. However, UPS could choose 777Fs as the eventual replacement for its entire MD-11F and 747-400F fleets..

Then there is the wildcard of Iran. There are rumors that some 747-8 aircraft are in the order currently in political limbo, including the 747-8Is originally ordered by the now-bankrupt Transaero. Could there also be some freighters?

And finally, two other factors may influence the fate of the 747 program. First, just as Silk Way and AirBridgeCargo entered the 747 freighter club in recent years, other carriers might join in the future. This is not particularly likely in our view, but then, who would have bet ten years ago on AirBridge ordering twenty-five 747-8Fs? Second, both Boeing and Bedek Aviation Group are known to be working on freighter conversion programs for the 777. Should these programs be launched, carriers looking for widebody lift will immediately have a much cheaper option than new-build 777Fs and 747-8Fs

Where does all this leave the 747 program? As things stand, Boeing has enough orders in its backlog to carry the program into 2020 at a build rate of six aircraft per year. If our above carrier-by-carrier analysis is on target, Boeing could gain significant orders (ten or more units) from Atlas, China Airlines, and UPS; and perhaps a few smaller orders from Asiana and Cargolux (and possibly Saudia and Silk Way). If some of these orders materialize, it could extend production for a few years, but the clock is ticking. Boeing probably needs a lead time of one-and-a-half to two years on 747-8 orders. So even though the line will continue to run until 2020, the decision to continue the program beyond that date will have to be made by sometime in 2018.

Absent significant orders in the next two years, Boeing will have little choice but to end 747 production. And even if some orders are placed, the life extension will only be a few years.

On one hand, this is no big deal. Fifty years is an amazing lifespan for any aircraft program, and to expect more is unrealistic. On the other hand, there has never been an airplane that changed aviation in the way the 747 did, and to say goodbye to it will be strange and more than a little sad.

In Part I, we offered an historic video of the launch of the 747 program with the -100 variant. Today we conclude with a video made almost fifty years later, showing the production of what will almost certainly be the last 747 variant, the -8F.

And we encourage you to join us at the Cargo Facts Symposium in Miami, 10 – 12 October, where senior executives from major carriers and lessors, as well as from Boeing itself, will address the question of how current trends in the air freight industry will affect future fleet needs. To register, or for more information, go to CargoFactsSymposium.com.

In the meantime, here is the original Boeing promotional video about the introduction of the 747 almost fifty years ago.

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