Cargolux: How an all-747 operator plans for a future without the 747

Shanghai – It’s no secret that Europe’s largest all-cargo carrier, Cargolux is a fan of the 747. The Luxembourg-based carrier took delivery of its first 747-200F in 1979 and has remained an operator of the aircraft ever since; today Cargolux’s fleet is comprised of twenty-seven 747Fs, including fourteen -8Fs. During an interview at Air Cargo China, Cargolux President and CEO, Richard Forson acknowledged that 747 production will not continue indefinitely, and detailed his long-term plans to keep the airline flying high even after the ‘Queen of the Skies’ sails off into retirement.

Beyond 2022, it remains unclear how long Boeing will continue to produce the 747-8F. Forson, like executives from other carriers operating 747-8Fs, said that Boeing was no longer taking new orders for the 747-8F, adding “They have not made any definitive announcement as to whether the program will continue or not.” In the short-to-medium term, Cargolux should be covered with its existing fleet, and the availability of used 747-400Fs. “There are still very good 747-400Fs on the market available in the 2005-2008 timeframe,” added Forson. But when the market is doing well, as it has been for quite some time, competition for these aircraft is rather fierce.

If air cargo demand continues to follow this upward trajectory, however, the industry could easily see a mismatch between available maindeck capacity, and demand for lift. As readers of Cargo Facts are likely privy to, a comparison of the future demand for widebody freighter aircraft (that includes retirements of existing widebody freighter fleet types such as the MD-11F, 747-200F and 747-400F) versus outstanding orders for widebody freighters reveals what will likely be a deficiency for maindeck capacity. Most outstanding orders stem from express operators such as FedEx and UPS rather than general cargo carriers. “Will this lead to a surge of orders for freighter aircraft,” questioned Forson. “It’s uncertain,” he continued, because of the volatility in the market. “The big question now is, will this level of demand continue throughout the traditionally slow months?”

Post-747, Cargolux to pursue a mixed fleet strategy

Regardless of precisely when Boeing idles production of the 747, that day will inevitably come. Forson estimates that most 747-400Fs will be phased-out by 2030, while the -8F could continue to fly beyond 2040. Although it remains unclear what OEMs Boeing, and potentially Airbus will have on offer five-to-ten years from now, most expect a new generation freighter based on an existing or forthcoming passenger model, such as the 777X, or Airbus’ A350.

But in the unlikely event that Airbus or Boeing decides to develop a purpose-built freighter, Cargolux’s dream aircraft would be a twin-engine aircraft with the same characteristics of 747-8F. Moreover, it should be constructed “Using the latest manufacturing materials, providing the strength in the maindeck to carry the heavy outsized pieces we carry at Cargolux.”

Back to reality, Forson praised the operational efficiencies of the 777F, noting that an estimated 85% of what his airline carries today could be moved on that aircraft. Still, Forson would rather hold-off on adding a fleet type until the next generation technology hits the market. “I think we would probably have an interest in 777X freighter. But from an airline perspective, if I had to do a swap, I would probably wait until I could make a swap into a new-generation freighter, and then we will have a mixed fleet at that point in time.” Compared to operating a single aircraft type, a mixed fleet would introduce layers of complexity. Right now, Cargolux benefits from not having to contour pallets to multiple aircraft types, and by being be able to switch-out aircraft at any time without needing to change pilots. “But there will come a time when there might not be any other options. It’s inevitable that we will have two types in our fleet,” said Forson.

While most general cargo is easily loaded through a side cargo door, about 15% of what Cargolux carries today requires the nose-loading capabilities of the 747. “The major disadvantage once the noseloaders get retired, is how are you going to transport outsized pieces that don’t fit through the side cargo door?” This question is certainly tougher to answer. One option Cargolux says it has considered is airships. The biggest drawback according to Forson, is the long distances they would be required to travel. “The airship certainly has a place for relief aid, but they are not a replacement for general cargo. When it comes to trans-Pacific routes, from a safety perspective, it’s a challenge enough for the aircraft that fly today.”  If demand for outsized cargo transport persists into the distant future, Forson imagines the 747 could play a niche role like the An-124 plays today in demanding premium prices for moving outsized cargo.

Returning to the present, Cargolux won’t have to make a fleet replacement decision for quite some time. In the near-term, the airline plans to add two used 747-400Fs to its fleet in 2019. These aircraft, like a third that is currently on lease to another airline, have already been acquired. If market growth continues to warrant fleet expansion, Cargolux could find itself adding more -400Fs in the coming years.