Cathay Pacific took delivery last week of its fourteenth 747-8F. Might it order more?

Yesterday, in Part I of this three-part analysis, we quoted Boeing’s warning that, unless orders picked up, it was “reasonably possible that we could decide to end production of the 747.” You can read Part I here, and Part III here. Today we continue with Part II

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, and yesterday we concluded our post by asking: What will the thirty-three carriers (shown in a chart in Part I) who now operate 747-400 freighters do as operation of those freighters becomes uneconomical?

There is no simple answer to this question. For one thing, the -8F is available only as a new production airplane with a list price of $379 million – affordable only for large, first-tier airlines. Many of the 747-400F operators acquired their freighters on the used market, or had them converted from passenger units, and these carriers are simply not in the “refleet with 747-8F” discussion. So outfits like Aerotrans Cargo, Air Cargo Global, CAL Cargo Air Lines, Centurion/SkyLease, El Al, Kalitta Air, myCargo Airlines, National Airlines, and Western Global Airlines are eliminated. Probably Air Atlanta Icelandic, as well.

This still leaves plenty of 747-400 freighter operators with the ability to afford 747-8Fs, but here, Boeing’s success with the 777F has been its own worst enemy when it comes to 747-8F sales. As can be seen in the chart at right, Boeing’s 777F program has been hugely successful, and many carriers that might otherwise have lined up for 747-8Fs have either already chosen, or likely will choose, 777Fs instead.

Looking at the potential 747-8F customers on a carrier-by-carrier basis, we can divide them into two groups, the first of which is made up of airlines that probably could afford 747-8Fs but have either indicated that they do not want to operate them, or already have all they need. This group includes:

• AirBridgeCargo and CargoLogicAir: These Volga-Dnepr Group subsidiaries have recently committed to twenty more 747-8Fs, and further orders are unlikely.

• Air China Cargo: Air China’s cargo arm has already embarked on a refleeting program with 777Fs.

• Air France-KLM: AF-KLM has made it clear that freighter orders are not in the cards in the foreseeable future.

• Air Hong Kong: If AHK replaces its 747-400BCFs, it will likely be with hand-me-down -400Fs or ERFs from Cathay.

• ASL Airlines Belgium: The former TNT Airways now operates for FedEx, and FedEx is not going to be ordering 747-8Fs.

• Cathay Pacific Airways: Cathay’s six 747-400ERFs are all young (2008 and 2009) and won’t need replacing for at least another ten years. Recent comments from the carrier’s cargo arm lead us to believe that the no change to the current fleet of -8Fs and -400ERFs is under consideration.

• China Cargo Airlines: China Cargo recently made the decision to replace its 747-400F fleet with 777Fs, so 747-8F orders seem unlikely.

• China Southern Airlines: China Southern also made the decision to switch to 777Fs.

• Emirates: ASL Airlines Belgium (formerly TNT Airways) operates two 747-400ERFs for Emirates on a CMI basis, but the rest of the Dubai-based carrier’s fleet is made up of 777Fs.

• EVA Airways: EVA has committed to 777Fs for its refleeting program.

• Korean Air: Korean is a 747-8F operator, but has committed to 777Fs for the remainder of its refleeting plan.

• Nippon Cargo Airlines: Given that NCA recently cancelled four 747-8F orders, we do not see much chance of future orders.

• Singapore Airlines: SIA has considerably reduced its freighter fleet in recent years, and now operates just eight 747-400Fs. Given that SIA no longer operates 747 passenger aircraft, it seems likely that if the carrier replaces its 747 freighters, it will be with 777Fs to achieve commonality with its large 777 passenger fleet..

• Yangtze River Express: HNA is putting money into YRE, but the focus is on the carrier’s entry into passenger ops. A 747-8F order seems unlikely.

That’s the bad news. Tomorrow, in Part III, we will look at the remaining 747-400F operators who could be considered as potential customers, and our conclusions about the future of the 747 program. 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.