The decision by British Airways to exit the dedicated freighter business by returning three Boeing 747-8Fs to ACMI operator Atlas Air demonstrates the continued weakness of the global air freight market.
Boeing is counting on the global freight market to improve this year, and with it, sales of the 747-8F. We’re not so sanguine.
Even if the global freight market improves, we are skeptical that Boeing will see much in the way of orders to boost this faltering program. There remain a large number of 747-400Fs in the desert that can be recalled to service at a cost a lot less than a new-build 747-8F will cost. Likewise, there are still a fair number of 747-400 passenger aircraft in service and in storage ready for conversion.
We recognize that the 747-8F is more fuel efficient and maintenance is less than the 744s, but the much higher capital cost demands high utilization and risks greater financial impacts if the airplane has to be parked during a downturn.
Boeing’s 777F is smaller, less costly and uses less fuel than the 747-8F. While it also carries less, it can be argued that the 777F is “right-sizing” aircraft for the changing market conditions. But Boeing is struggling even with this model. The company sold just
one nine 777Fs since late 2011.
Boeing plans a 777-8F, but this will not enter service until well after the 747-8 program is likely terminated.
Airbus hasn’t had much success for its new-build A330-200F. Some customers proved to be unable to take delivery, while another—Intrepid Aviation—changed its entire order of 20 for the passenger version and up-gauging these to the A330-300 in almost all cases. The cost-benefit analysis by some concluded the price of the new-build A330F was too high for the benefit gained through economic efficiencies and payload. Airbus announced a small sale at the Dubai Air Show, but otherwise has seen a steady decline in the backlog over and above deliveries.
Aside from the continued economic weakness and a surplus of available used equipment, the belly cargo-carrying capability of the Boeing 777-300ER and the Airbus A330 enables shippers to take advantage of these aircraft for many flights. Interestingly, when Boeing prepared to ship all the equipment and repair components around the global for its 787 battery repairs, it used belly-freight capacity, not dedicated main-deck freighters.
The proliferation of 777s, A330s and the forthcoming A350 and the 777X may well further spell the demise of the 747-8F as nothing more than a niche aircraft based largely on sales already completed. We certainly expect to see a few more sales, but nothing consequential.