Cargolux, the all-cargo airline that grew out and up from tiny Luxembourg has a proud tradition of pioneering firsts including being the first carrier worldwide to operate the B747-400 cargo airplane 18 years ago.
Today September 19, Europe’s largest all-cargo airline was to have launched a new era for air shippers and a new chapter in its great contribution to air cargo, as the launch airline to receive the first new-generation 747-8 F aircraft.
But all of that was put on hold late last week, as Cargolux refused to accept the aircraft citing “contractual issues” that compelled its board, to reject the planes.
According to sources, the Cargolux board shut down the deal because the fuel burn of the GE-manufactured turbines was not in accordance with the performance guaranteed by Boeing to Cargolux when the order for the B747-8Fs was signed.
Sources say that the Qatar Airways faction within the Cargolux board of directors impacted blowing off the deal. Last June Qatar Airways purchased 35 percent of Cargolux from local Luxembourg banks and financial institutions.
By way of background, airlines and manufacturers generally agree on a binding permanent improvement program weeks if not months prior to the first delivery of a plane.
The agreement contains a firm deadline upon which all performance and other technical or organizational items have to be straightened out. If this fails to occur, the carrier can reject the acceptance of the aircraft.
The 747-8 freighter won certification last month from the U.S. Federal Aviation Administration to enter commercial service. But Boeing is two years late with this airplane that so far has only delivered a reported $2.04 billion cost overrun at Boeing.
Added to the B787 fiasco, right now with a three-day party all set up to celebrate B747-8F that the guest of honor refuses to attend, Boeing looks like the gang that can’t shoot straight, let alone build airplanes.
There is also the specter of an embarrassing first for these type of things—an aircraft delivery all set to go with even some revenue cargo booked to fly—that didn’t happen.
"We continue to work with Cargolux and look forward to delivering its airplanes,” was about all Boeing could come up with as an excuse.
Financing, secured through JPMorgan, was put on hold, Cargolux said Friday.
In the event that the issues cannot be resolved in a timely manner, Cargolux will source alternative capacity to fully meet customer demand and expectations ahead of the traditional high season,” the company added.
Air Cargo News Flying Typers
Gravity always wins!
Blimey I am sure this is not down to performance, Cargolux must have done their homework months ago and would have known of any performance issues.
My guess, there must be some compensation issues that have not been resolved, hence the delay
Goose,
It is impossible to find out what the real reason is for this "snafu". Of course financial compensation for performance goals not reached is problably the biggest issue as you say. Here is the latest information I have found:
While Boeing declined to identify the source of the friction with Cargolux over the 747-8, aviation experts suspected the dispute was over performance guarantees related to fuel consumption of the General Electric engines. The 747-8 features GE's GEnx-2B67.
"The performance problems were well known and they were supposed to be addressed by Boeing and GE," said Adam Pilarski, senior vice president at AVITAS, an airline consulting company that also works with aircraft lessors and lenders.
Pilarski said he had no first-hand knowledge of the matter, but he said the issue probably had been percolating for some time. He said customers sometimes request financial compensation if they believe an airplane will not live up to their expectations.
Pilarski said he thinks the issue could be resolved within weeks and that Cargolux will still be the first 747-8 customer.
"It will be resolved with financial conditions," he said. "Right now they are playing chicken."
Boeing has taken 78 orders for the 747-8 Freighter, which lists at $319.3 million, according to the company's web site.
Reuters Kyle Peterson
That maybe so flyvertosset, but i bet this as something to do with it. With Qatar airways having a 35%stake in Cargolux, the long standing dispute between Mr Akbar Al-Baker at Qatar and the compensation for delays over the 787s
According to multiple sources at ISTAT, Qatar's chief executive Akbar Al-Baker views the compensation for Cargolux as setting a benchmark for the sum due for the delays to Qatar's 787s.
The performance shortfalls of the 747-8F have been known to customers for at least a year as production proceeded.
You are absolutely right about the Qatar Airways link to the delay, I found that information after my last posting. Here is a bit of good news for Boeing.
Cathay Pacific Airways Ltd. said today its plans to receive the new Boeing 47-8F cargo plane are unaffected by the contract dispute between Boeing and launch customer Cargolux Airlines International SA.