Shortly after warning investors that the 747-8F was facing an unprecedented level of future uncertainty as the program’s order backlog dwindled, Boeing announced a massive firm-order for fourteen of the jumbo freighters (and options for up to 14 more) from express giant UPS. The order was announced simultaneously with UPS’ release of solid third-quarter results.
With deliveries expected to begin next year, and continue into 2020, this is the lifeline that the “Queen of the Skies” desperately needed to keep production humming along for at least a few more years.
Cargo Facts had long considered UPS a possible candidate for the 747-8F. After all, the integrator operates a large fleet of MD-11Fs and 747-400Fs which will have to be replaced at some point. What is not clear, is whether UPS is planning any retirements concurrent with the delivery of its new 747-8Fs, or whether the 747-8Fs will be operated in addition to the existing fleet. In a statement, the company did say the 747-8Fs will “enable UPS to begin a cascade of aircraft route reassignments that will add significant air capacity to the company’s busiest lanes, thereby optimizing global air network capacity well beyond the impact of adding new cargo jets.”
The significant capital investment is also a sign that UPS does not expect emerging competition from Amazon’s Prime Air, or the global ambitions of rising Chinese integrators, to hinder its future ability to fill large widebody aircraft on international routes. While neither UPS, nor Boeing commented on the value of the deal, we expect UPS struck a bargain — similar to FedEx’s first big order for 767Fs five years ago.
Today in Paris, during the TIACA Air Cargo Forum, operators of the 747-8F breathed a big sigh of relief upon hearing the news, because it means that in a few years, when it is time for them to replace aging 747-400Fs, the 747-8F will still be availalbe. For example, Silk Way West Airlines CEO, Kamran Gasimov told Cargo Facts that his airline, which is about to receive the last of five 747-8Fs it ordered, has enough capacity for now, but by 2020, that could change.Like This Post