Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
- Bjorn’s Corner: New engine development. Part 3. Propulsive efficiency April 12, 2024
- A350-1000 or 777-9? Part 2 April 11, 2024
- Pontifications: Boeing “transparency”–not so much. April 9, 2024
Analyzing Air Bridge Cargo plans for Boeing 747-8F
Dec. 15, 2015, (c) Leeham Co.: A plan by Russia’s Air Bridge Cargo to acquire another 18 Boeing 747-8Fs does little to solve Boeing’s production gap and program viability, an analysis by LNC shows.
Bloomberg News published a story yesterday saying the fate of the 747 program rests with Air Bridge Cargo, which announced an MOU for 20 747-8Fs at last summer’s Paris Air Show.
But as LNC reported shortly after the MOU was announced–once we had the opportunity to look behind the hype–it was clear that the news was hardly anything to count on.
This remains the case despite Bloomberg’s story.
Figure 1 (Corrected). Click to enlarge.
There are six white tail 747-8s, according to the Bloomberg piece, including two passenger models for TransAero. There is a third that had been intended for Lufthansa, and there are a couple of VIP models that have been stored which may or may not be considered part of the white tails count Bloomberg tallies. One known white tail freighter is the Seahawks-colored airplane that has been flying around this year. The two 747-8Fs that Air Bridge leased from Boeing Capital Corp. this year are planes that were built for Asiana Airlines, which declined to take delivery.
According to the article, Air Bridge Cargo plans to take three 747-8Fs next year on lease. These will likely be either white tails or new builds in the production. In Figure 1, we’ve included the Air Bridge three in the solid blue bar for 2016.
Air Bridge told Bloomberg it would then take “two or three” 747-8Fs per year through 2022. These are assumed to be three per year (otherwise the math doesn’t work) and allocated through 2022. This is represented by the yellow bar.
Boeing’s current production rate for the 747-8 is 16yr, reducing to 1/mo (effectively 12/yr) in March next year. At this rate, Boeing has a large production gap from the scheduled deliveries (blue) in 2017 and beyond. There are no scheduled deliveries in 2018-2020. The US Air Force plans to replace two 747-200s for Air Force One, taking delivery of at least one in 2018. We’ve assigned both of these to 2018 (green). There is one To Be Determined delivery.
We’ve assumed Boeing will take the production rate down further to 0.75/mo (9/yr) in 2017 because the production rate gap at 12/yr is similar to big a bridge to build. Even at 9/yr, and including the Air Bridge plans–of these actually firm up–there remains a gap in 2017 and increasing gaps thereafter.
Boeing hopes the global cargo market returns to a 4%-5% growth, but it’s currently going in the other direction and increasing belly capacity in the A330/350 and 777-300ER/787 and, from 2020, the 777-9 fleets will continue to eat into the main deck freighter demand.
QUOTE:
Boeing hopes the global cargo market returns to a 4%-5% growth, but it’s currently going in the other direction and increasing belly capacity in the A330/350 and 777-300ER/787 and, from 2020, the 777-9 fleets will continue to eat into the main deck freighter demand.
And there is more: the market being flooded with cheap mid-aged widebodies. Then there is the “idle fleet”. Overall, plenty of volume for low cost. Probably more sensible to be a converter in a low wage region than being an airframer with a close-to-idle production line for 120t-freighters.
When you see Kalita Air flying a 747-400F (not BCF) you know things have changed.
Nothing against Kalita, but they are not noted for flying the latest hardware.
If a 400F is available to them at the price they believe they can make money at there are others probably newer and or retied from the 747-8 buyers that would be great pickups for others.
In other words you can get a pretty good modern aircraft and in this fuel environment be competitive. You don’t even have to go to a BCF and those are sitting as well.
It would be interesting to get actual numbers of each currently parked.
Hate to see it as I think the 747-8F is one of the finest looking jets of all time but the writing is on the wall.
There’s a typo in the chart, 9/mo => 9/yr
Never a shortage of critical analysis of Boeing on this site.
I wonder why?
Any suggestions on blogs to read for critical analysis of Airbus?
See https://verovenia.wordpress.com/
Bobby:
Its a US site and Boeing has made blunders of biblical proportions. You don’t improve glossing over your screw ups. Basically Boeing management blames all the problems on the workers and not only does not accept responsibly , they have zero accountability (the managers get their bonus and sweet retirement deals)
Or as they said in the Dallas Cowboys and Miami Dolphins game in a snow storm many years back, Dallas snatched defeat from the jaws of victory.
Plenty of critical assessment of Airbus for their ops when its justified.
On the other hand while not the colloses Boeing has become, Airbus has been pretty good on their feet maximizing what they have to work with and limiting the damage (mostly the A380)
They also do not make comments about cowering workers, in other words self inflicted wounds by Boeing.
Not stupid remarks like we have them boxed in on Wide-bodies only to see them disprove that with the A330NEO and A350.
Bobby:
If you appreciate a reality that is edited in relation to what you might think is in your country’s interest, you can see a very good example here:
https://www.rt.com/
then please move on to:
http://www.boeingblogs.com/randy/
and finally
https://youtu.be/6zT8AyfsFmA?t=2m32s
And a Meery Christmas
KR/Airboe
Figure 1 says something about 9 747 per month. I first thought about a real big order but I suspect a small typo.
Figure 1 has been corrected.
Bobby and Steen
I follow this site (Leeham) for various reasons, including the fact that it is full of excellent information and analysis. I take the anti-Boeing slant for granted, I’m ok with it, and I agree that it’s good that Boeing’s critics have such a respected platform.
However, the tone of comments commonly posted here that Boeing’s management is either inherently greedy, incompetent, dishonest, and/or malicious toward the workforce while Airbus management is benign and wise, do not enhance the credibility of Scott’s excellent site, nor do they reflect well on the commenters. Just as Boeing’s leadership would do well to pay close attention to Leeham’s criticisms, Airbus could benefit by taking note of VV’s excellent commentary.
I try to keep the sort of commentary @Ipper refers to at a minimum, but I don’t constantly monitor Comments and it is true some of this slips through.
I remind all Readers to refresh yourselves with the Reader Comment rules. This sort of stuff is not permitted.
Hamilton