Decline in options curbs 2020 freighter orders

After a surge in orders for production freighters in 2018 , followed by record deliveries in 2019, it was never expected that 2020 would be a runaway year for production freighter orders — absent the launch of a new program. While freighter variants of the 777X and the A350 remain the most likely contenders, new programs did not materialize in 2020. In fact, Boeing formally announced an end to the 747-8 program in 2022, upon fulfilment of its outstanding order backlog. Once again, Airbus did not clock any new orders for its A330-200F, nor did the company deliver any freighters. Instead, the 767-300F, the express industry’s workhorse, and the versatile 777F dominated orders and deliveries in 2020. Backlog falters amid order deficit Total orders for fifteen freighters — consisting of five 777Fs, nine 767-300Fs, and a single 747-8F — came from only five customers: China Cargo Airlines, EVA Air, FedEx, UPS and an unidentified customer. Excluding the unidentified customer, all of 2020’s production freighter orders were top-up orders from existing operators of the respective models. If the five unidentified 767-300F orders are for the same, non-integrator customer, the express integrators would account for only one- third of the twelve net orders for production jet freighters in 2020. In fact, FedEx would be the sole express customer that contributed to a net growth in Boeing’s order book last year, with four 767-300Fs. Of course, the unidentified customer could turn out to be completely new. Other players with expanding freighter-converted 767-300F fleets include carriers operating for Amazon, DHL Express and SF Airlines. We note that, despite the single 747-8F order from UPS, there was no net addition to the backlog since UPS merely decided to take up the earlier frame — previously destined for Volga-Dnepr Group’s AirBridgeCargo — and canceled an existing order for a later aircraft. It is therefore not included in our table of net orders for 2020. The same is also true of the two 777Fs ordered by , and delivered to , China Cargo Airlines. These aircraft were originally ordered by Volga-Dnepr , but Boeing eventually sold them to the Shanghai-based airline. The past year was the fifth in a row without a single order for the A330-200F. In January 2020 , it was revealed that Colombia-based Synergy Aerospace Corporation, the majority shareholder of Avianca, had canceled its order for a single frame. As of the end of 2020, there are only three remaining unfilled A330-200F orders for Turkey-based MNG Airlines. The carrier, which took its first and only A330-200F in 2012, could not be reached for comment regarding its order backlog, but had told Cargo Facts in 2019 that it was considering converted A330Fs. With the number of passenger A330s parked around the world, and a maturing A330 freighter conversion program by Elbe Flugzeugwerke (EFW), the prospects for the factory-built A330-200F may be even bleaker than last year. As of Nov. 30, 2020, excluding the nine freighters delivered in December, Boeing had eleven 747-8Fs, thirty-three 777Fs, and forty-four 767-300Fs still on firm order , including : Eight 747-8Fs for UPS; Three 747-8Fs for Volga-Dnepr; Four 777Fs for China Airlines; Four 777Fs for DHL; Three 777Fs for EVA Air; Seven 777Fs for FedEx; Six 777Fs for Hong Kong International Aviation; One 777F for LATAM Airlines Brasil ; Two 777Fs for Qatar Airways; Six 777Fs for Volga-Dnepr; Thirty-six 767-300Fs for FedEx; Three 767-300Fs for UPS; and Five 767-300Fs for an undisclosed customer. L ooking at Boeing’s freighter backlog, while most orders are likely to be fulfilled, some revisions to the order book are expected. Sources familiar with 747-8F production have expressed doubt that Volga-Dnepr will take delivery of the three remaining 747-8Fs it has on order after a spat with Boeing in 2020 that led to UPS taking a 747-8F that had bee n previously ordered by the Russian group. The 777F orders placed by LATAM Airlines Brasil and Hong Kong International Aviation have sat idle in recent years. LATAM Cargo previously operated 777Fs, but in 2018 transitioned to an all-767 freighter fleet. At th at time, the carrier maintained it would eventually return to its fleet 777F , although d oing so would likely require more than one 777F as few long-haul networks function with a single large widebody freighter. Hong Kong International Aviation, meanwhile, has not recently commented on the status of its own 777F order. Deliveries (mostly) business as usual Considering the worldwide challenges suffered by the aviation industry in 2020, the overall picture seems more positive when it comes to deliveries . Accounting for production disruptions related to COVID-19 earlier in the year, when Boeing suspended all manufacturing activity in Washington and South Carolina, the deliveries of forty-six freighters were nearly on par with Boeing’s 2019 total of fifty-two units. Although down six units from 2019, last year's deliveries surpassed the five-year rolling average of 39.8 units. In fact, the number of freighter deliveries in 2020 outnumbered orders by a factor of close to four — the largest difference in at least eight or nine years. Despite a small ramp up in production rate for the 767 program at the beginning of 2020 to three aircraft a month, Boeing delivered one fewer 767-300F than in 2019. Ten customers took delivery of 777 freighters and, unlike deliveries of 767-300Fs and 747-8Fs, which were only added to the fleets of express carriers, a mix of carrier types added 777Fs, including express, all-cargo and combination carriers. Combination carriers added fourteen 777Fs, while DHL and FedEx took a combined total of eight. AirBridgeCargo was the only all-cargo carrier to take delivery of a 777F in 2020. Notably, both AirBridgeCargo and China Airlines were previously all-747F operators , and are the latest members of the 777F club. Other carriers with sizable fleets of 747Fs including Atlas Air and Cargolux are evaluating the limited replacement options — the 777F and forthcoming 777-300ERSF — while supporting the launch of new large widebody programs. Although Boeing’s primary focus for its forthcoming 777X remains the passenger variant, Boeing continues to explore a freighter version of the aircraft. “We will continue to talk to customers in the market and try to understand the needs of the freighter space for a freighter variant of that program,” said Darren Hulst, vice president, commercial marketing of Boeing, at the 2020 Cargo Facts Symposium. It’s typical to see a flurry of deliveries just before a quarter or year ends, and th is rule held especially true in 2020. With global air cargo capacity still tight in the final quarter, Boeing and its freighter customers strived to sign off on aircraft that would inject much-needed main-deck space into the market. Boeing delivered nineteen freighters in the final quarter of 2020 — more than 40% of the year’s total — compared to twelve in the same period in 2019. In December 2020 alone, nine freighters were delivered, and most were put straight into service. Looking ahead to 2021, total deliveries are unlikely to be higher than last year, considering factors such as slowing orders, a lowering of the 777 and 777X program’s production rate to two per month, and growing activity in the conversion market. [ This feature first appeared in the January 2021 issue of Cargo Facts. ]

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