UPS strategy pivot limits fleet growth

[caption id="attachment_413969" align="alignright" width="460"] UPS passed up an offer from Boeing to purchase additional 747-8Fs, according to new CEO Carol Tomé. (Photo: UPS)[/caption] UPS ’ new CEO Carol Tomé, who took over the reins from David Abney on June 1, outlined a new direction for the company that will prioritize higher-quality revenue streams over volume growth. Future fleet additions and capital investments will be more rigidly scrutinized, which could restrain further fleet growth for UPS. “What we have done in the past is built capacity or bought capacity, and then hope that demand would follow,” said Tomé today during a call with analysts to discuss UPS’ second quarter results. The old UPS “would take demand at any cost or any price,” Tomé continued. No longer is that the case. “It’s about being better, not bigger.” Referring to the looming end to 747-8F production , Tomé said UPS passed up Boeing ’s offer to purchase additional 747-8Fs, which was an “investment that in the past, we might have made,” she said. Despite forgoing an order for additional units beyond the twelve 747-8Fs in its order backlog, UPS’ 747F fleet helped deliver significant revenue growth which rose 13% to $20.5 billion in the second quarter. UPS said it added 635 flights during the quarter to alleviate capacity constraints, and to meet the pandemic-fueled demand for shipments of medical supplies. International express volumes rose 9.8% YoY led by a 46.8% uptick in outbound volumes from Asia. All other major regions saw double-digit growth, according to UPS. For more on UPS’ Q2 earnings, see the story on our affiliate site, Air Cargo World . As it currently stands, UPS has on order twelve 747-8Fs and six 767-300Fs from Boeing, plus outstanding agreements to acquire three ex-Lufthansa MD-11Fs , and to lease two 767-300BDSFs from CAM . The integrator paid the full purchase price for five MD-11Fs in December 2019 and received two of them (48805 and 48806) this January, ferrying them from Victorville (VCV) to San Antonio (SAT) for maintenance. Unit 48805 appears almost ready for service, having been brought to Grissom (GUS) to be painted on July 17 and returning to SAT on July 30. UPS had previously told Cargo Facts it expects to have the two aircraft online in August.

UPS strategy pivot limits fleet growth

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GA Telesis moves into 737NG freighter market

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Related Posts

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CARGO FACTS CONSULTING

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Follow Us