Boeing won a launch order from Qatar Airways for the new freighter version of its 777X wide-body jet in a multibillion-dollar agreement signed in Washington on Monday.
The US plane maker’s share cost closed 5 percent higher at the end of market trading after it closed the largest cargo plane commitment in its past by value.
Here is a look at the significance of Boeing’s freighter deal for the company, its potential airline customers, and the successful international air cargo market.
Boeing launched the 777-8 freighter
On January 31, Boeing launched the 777-8 freighter, the world’s biggest twin-engine cargo jet. The plane has the most increased payload and the lowest fuel use, emissions, and running price per tonne of any big freighter, according to Boeing. It will offer a 25 percent advancement in fuel efficiency while reducing emissions and running prices by the exact magnitude.
It builds on advanced technology from Boeing’s new 777X passenger jet and its recent best-selling 777 cargo plane.
With a payment payload of 112.3 tonnes and a range of 4,410 nautical miles (8,167km), the 777-8 cargo plane has the lowest fuel use, emissions, and running charge per tonne of any large freighter, according to Boeing.
The first delivery of the plane, which is powered by General Electric’s GE9X engines, is scheduled for 2027 when many operators will be looking to replace aging 747-400 cargo planes later this decade. Qatar Airways signed an order worth $6.8bn for GE9X engines as part of its 777-8 freighter responsibility.
Boeing will build the 777-8 freighter
Boeing will build the 777-8 freighter at its factory in Everett, Washington state, once its technical team completes the jet’s detailed design.
This is the first order for a freighter version of the world’s largest twin-engine passenger plane, whose debut is running three years behind and is scheduled for late 2023.
The deal offers a silver lining for the Chicago-based planemaker as it grapples with the impact of the Covid-19 crisis, production issues on the 787 Dreamliner, and holds to the release of its 777X passenger version.
“The launch of the 777X freighter could become a significant lifeline for Boeing as they have been working with multiple crises,” said Linus Bauer, founder and managing director of Bauer Aviation Advisory.
The agreement is a “welcome achievement” for Boeing, given the numerous delays that have impacted the delivery of the 777X, he said. The delivery of the passenger jet was initially planned for 2020.
What is the state of the global air cargo market?
The freighter deal comes amid a boom in the global air cargo market despite the Covid-19 pandemic. Driving that demand is the surge in e-commerce sales, supply chain disruptions, and competitive air cargo prices when compared with sea freight.
International requests for air cargo grew 6.9 percent in 2021, reached pre-coronavirus levels in 2019, and strong development has been forecast for 2022, according to Iata.
Boeing 777X at Dubai Airshow
“The current cargo aircraft orders and aircraft conversion actions confirm that the freighter market stays strong even as Airbus and Boeing continue to struggle to make big aircraft order deals on the commercial side of the aviation business,” Mr. Bauer told.
What is the significance of the arrangement’s timing?
The arrangement reaches as Boeing and its European arch-rival Airbus face off in the big freighter jet market.
Boeing has long held an iron hold on the cargo market with its range of freighters — including the 747F, 767F, and 777F wide-body aircraft — that make up most of the world’s cargo fleet.
However, Airbus has sought to loosen Boeing’s hold, establishing the A350F, a freighter version of its most delinquent passenger aircraft, in 2021.
“Cargo carriers like Emirates and Qatar Airways are already aware of Boeing’s strengths in creating freighter aircraft, as almost every one of Boeing’s commercial aircraft has a freighter variant to date,” Mr. Bauer told.
“However, Airbus’ successful unveiling of the new A350F variant in 2021 will challenge Boeing in the growing cargo aircraft segment of the market.”
- Qatar Airways’ order with Boeing also reaches after a months-long, bitter dispute with Airbus over paint defects on A350 passenger jets that is now before the courts.
“Launching the 777x freighter restarts the line of new-build freighters for Boeing and will be important to customers that require the larger sizes, especially as the 747F is retired,” told George Ferguson, Bloomberg Intelligence’s aviation analyst.”The 777X will be more extensive than the A350-1000 and the most extensive new-build freighter on the market.”
How robust is the airline’s need for freighters amid the pandemic?
The replacement of aging planes and acquisition of newer ones to drive development will make the request for 2,610 cargo planes near the world in the next 10 years, Boeing told in its latest 2021-2040 market outlook.
Of these, 890 jets will be aircraft that roll off the display line as freighters. The remaining 1,720 are anticipated to be passenger aircraft conversions, Boeing told.
“Airlines have gained the broader appreciation of air freight during the pandemic; it has been a lifeline in the absence of passenger traffic,” aviation analyst John Strickland told.
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“Beyond the pandemic, supply chain challenges and growing demand for e-commerce will boost the need for air freight.”Air cargo need is anticipated to stay robust beyond the pandemic, Mr. Ferguson expressed.
“The pandemic has spurred a lot of need for freighters but the 777X will be more extensive than most and a recent build, so that should support long-term demand,” he expressed.
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