Boeing stands by dedicated freighter market

Seattle
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Boeing anticipates continued demand for new dedicated freighter aircraft, despite recent weakness in the cargo market.

“There will always be a need for freighters,” said Carrie Shiu, director of product marketing for the 777 family at Boeing, at a Lufthansa Cargo 777 freighter media event in Seattle on 10 October. “You cannot sit next to a horse.”

Boeing anticipates that cargo traffic will grow an average of 5% annually over the next 20 years, according to its latest current market outlook. This will require 2,300 freighter deliveries with 850 new aircraft and 1,450 conversions.

The airframer anticipates 80% of the new freighters will be large aircraft with a maximum weight of at least 80t, such as its 777 and 747-8 freighters.

Karl Ulrich Garnadt, chairman and chief executive of Frankfurt-based Lufthansa Cargo, says that the carrier stands by its dedicated freighter fleet though a significant portion of its cargo traffic does travel in the belly of passenger aircraft.

“In order to be represented there and provide sufficient capacity to these destinations the only aircraft that can do it is a freighter,” he says referring to North American logistics hubs in Atlanta, Chicago, Houston, Los Angeles and New York.

“The combination of the smaller destinations with the passenger and the larger destinations with the freighter is a key to be successful even in volatile market environments,” adds Garnadt.

Lufthansa Cargo will take delivery of its first Boeing 777 freighter on 31 October, which will replace one of its 18 Boeing MD-11 freighters. It has five 777s on order with options for five more.

Not everyone agrees with the demand for freighters.

“Main deck freighters make no sense,” said Richard Anderson, chairman and chief executive of Delta Air Lines who helped manage Northwest Airlines’ freighter fleet in the 1990s, earlier in October. “I can’t imagine a passenger airline operating [them]. I operated main deck freighters for a long time and couldn’t figure out how to do it.”

He added: “You better shut it down or you’re going to lose your shirt.”

The cargo industry remains challenged. Aeroflot decided to sell its stake in its cargo subsidiary in 2012 while Air Cargo Germany liquidated this past September. FedEx accelerated the retirement of old aircraft in order to modernise its fleet and reduce costs in June and UPS has lowered earnings guidance due to slow economic growth during the past year.

“The consensus is that air cargo will come back,” says Garnadt. “However, [now] we are in a very difficult environment.”