Where have all the orders gone — Part II

Yesterday we looked at the sudden drop-off in orders for production jet freighters — despite surging demand for air freight. You can read Part I here (including detailed charts of the orders, deliveries, and backlogs for all of Boeing’s and Airbus’ freighters). Today we turn to an analysis of the order and delivery situation on a type-by-type basis, then conclude with a bit of speculation about the future.

Boeing and Airbus currently offer a total of four production jet freighters:

A330-200F: Airbus last booked an order for its only production freighter in 2015, and, in fact, has a net of minus four orders in the last six years. So far in 2017, the manufacturer has delivered two units – one each to Turkish Airlines and Etihad Airways. To date, Airbus has booked a total of forty-two orders for the A330-200F, and delivered thirty-eight, leaving it with a backlog of just four units — of which three are for Turkey-based MNG Airlines, which took delivery of the first of its four orders in 2013, and has not taken another since.

747-8F: After several years of drought, rain began falling on Boeing’s largest freighter in 2015 and 2016 with orders from AirBridgeCargo Airlines (twenty, through an MoU from parent Volga-Dnepr Group), UPS (fourteen), Silk Way West Airlines (three), and Atlas Air Worldwide Holdings (one), while Japan-based Nippon Cargo Airlines (NCA) cancelled orders for four. This left Boeing a net of thirty-four orders over the two years for a freighter program some observers had believed to be effectively dead.

But the order stream has dried up this year. An unidentified customer (which Cargo Facts believes to be Qatar Airways) ordered two units, but this was balanced by the cancellation of NCA’s two remaining orders.

Deliveries have also slowed, with Boeing delivering just two units – one each to AirBridge and Silk Way. Assuming AirBridge takes the remaining fourteen from the MoU, this leaves Boeing with a backlog of thirty. But we point out that several of the 747-8Fs in the backlog have already been built and are awaiting delivery, and that AirBridge may not take all fourteen. The true backlog is therefore less than thirty, and may be considerably less.

777F: The resurgence in 777F orders that began in 2014 and continued in 2015 came to a screeching halt in 2016, during which Boeing not only booked no new 777F orders, but in fact suffered a cancellation of four orders by Guggenheim Aviation Partners (now renamed Altavair). That order drought has eased slightly in 2017, but only slightly, as Turkish Airlines swapped two existing 777-300ER orders for freighter orders. Deliveries, too, have almost dried up, with Boeing handing off just one 777F so far this year, to Qatar Airways. To date, Boeing has taken orders for 167 777Fs and delivered 130, leaving it with a backlog of thirty-seven.

767-300F: FedEx was the only customer for Boeing’s 767-300F in 2016, with an order for six more units (bringing its total 767-300F orders to 112). The Memphis-based integrator was also Boeing’s only 767-300F delivery customer in the year, taking a total of twelve units. In 2017, the deliveries to FedEx continue, with Boeing handing over six so far. But with no new orders, Boeing’s 767-300F order book is unchanged at 196, leaving the manufacturer with sixty-three units in its backlog (all for FedEx).

Looking ahead, all signs point to a continuation of strong growth in air freight demand in the fourth quarter of 2017, with a good old-fashioned peak season. Will that be enough to start a flow of new orders for production freighters? Probably not. But if demand continues to grow in 2018,  it is hard to see carriers holding off any longer. Cargo Facts does not expect a flood of orders, but if things look good in early 2018, we expect more than a trickle.

We conclude this analysis with a bit of speculation. Rumors have reached us from a variety of sources that FedEx, UPS, and Amazon all want more production 767-300Fs — a lot more — but that Boeing has had to turn them down because it does not have the capacity to produce more. As mentioned above, FedEx still has over sixty on firm order, and Boeing is about to ramp up production of the 767-based aerial refueling tanker for the US Air Force, so the manufacturer’s 767 line is heavily booked for years into the future.

Is there anything to these rumors? We’re not sure about Amazon, but we’d be willing to bet that FedEx and UPS would take more 767s if they could. And probably so would SF Express and YTO Express.

Now keep all that in the back of your mind, and think for a minute about the 747-8. Demand for the passenger variant has completely dried up, and Boeing has pinned its hopes for the jumbo’s future on the need of cargo carriers to begin replacing their aging 747-400 freighters. But if that need does not generate new 747 orders very soon, what happens to the 747 production line — particularly if AirBridge doesn’t convert all the freighters in the MoU? Even at the current low rate of six aircraft per year, Boeing needs orders soon if it is to keep the line running.

Putting all the above together, we wonder if Boeing might be thinking about converting the 747 line to 767 production.

Yes, it’s all speculation based on rumor. Perhaps the rumored interest in new-build 767 freighters is baseless. Perhaps there is already an upsurge in interest in more 747-8Fs. Perhaps Boeing has some other plan for the 747 line. We don’t know, but it’s always interesting to follow the “what ifs” down the rabbit hole.