Singapore Air Show

Boeing Inks 747-8F Order, Sees Strong Cargo Market

 - February 5, 2018, 10:00 PM
This latest UPS order increases Boeing’s backlog to more than 100 freighters across the 747, 767 and 777 lines.

Global delivery company UPS has exercised an option with Boeing to order another fourteen 747-8F freighters, in essence doubling the order it placed in 2016 for the four-engine widebody. “As we celebrate the 30th anniversary of UPS Airlines today, we are seeing unprecedented demand for our air products,” stated UPS Airlines president Brendan Canavan. "The new freighters will allow us to continue upsizing aircraft on routes and will create a cascading effect that will boost capacity on regional routes around the world.” The UPS deal also includes four 767 freighters.

According to Randy Tinseth, the airframer’s vice president of marketing, with its current production pace of six 747-8Fs a year, that will extend its production of the aircraft out into the next decade.

Earlier in his career with Boeing, Tinseth was the company’s sales representative to UPS and helped introduce it to the 747-400. “When they use this aircraft, not only do they value the volume that it provides, they [also] value its ability to carry heavy cargo, because in many places they are carrying cargo in addition to packages,” he noted. “The -47 with the noseloader, with its ability to accommodate 10-foot pallets, with its ability to carry high-density cargo, gives it some flexibility that’s really unmatched in the market.” This latest order increases Boeing’s backlog to more than 100 freighters across the 747, 767 and 777 lines.

The news comes on the heels of the International Air Transport Association’s (IATA) release of its 2017 statistics, which saw a 9 percent increase in the air cargo transport market, based on only 3 percent growth in capacity. “This is the best market we have seen for cargo since 2010,” said Tinseth during a media conference call ahead of the Singapore Airshow. “We saw a market where traffic grew faster than capacity, which means that load factors are up for our customers.” Among the factors for the improvement, he cited growth in industrial production and trade, particularly out of Europe. “We’ve also seen a market now where many of those airplanes that had been parked on the ground for a number of years are now coming back, and we’re now to a point where there’s only a handful of airplanes available on the ground,” explained Tinseth. “That’s good news for our customers and us.”

He added that as a result of the burgeoning e-commerce market, the company is also experiencing significant interest in conversions of passenger versions of its products into cargo haulers. In the first quarter, Boeing will deliver the first 737-800 conversion, and as the oldest examples of that type are now reaching the point where they are removed from passenger service, the OEM expects feed stock for more conversions to expand.

The other platform where Boeing (Stand U09, U23) is seeing strong demand for conversions is the 767, having performed 22 to date, with another 25 in the backlog. Tinseth said that with a strong passenger market, values of used 767s remain high, creating somewhat of a challenge to locate suitable airframes at an appropriate price.