One of the more interesting developments from the Paris Air Show this week is that a Russian cargo airline will buy 20 of Boeing’s 747-8F freighters. The deal is said to be worth $7.4 billion, and it couldn’t have come at a better time for Boeing’s struggling 747-8 program.
This week’s order for 20 aircraft from the Volga-Dnepr Group is a big sign of confidence in Boeing’s jumbo platform. As of May 2015, Boeing had less than two years of work left for the 747-8 production line (this is combined between the 747-8I Intercontinental model for passengers and 747-8F model for cargo).
Ninety 747-8 aircraft have been built to date, with 33 in the “-8I” passenger configuration and the remaining 57 in the “-8F” cargo role. The sales outlook for the 747-8 has been grim, a depressing forecast for the iconic 747 family which has seen over 1,500 total aircraft delivered across all models since entering service in 1970.
The Volga-Dnepr order would add approximately 15 months of work to Boeing’s 747-8 manufacturing facility in Everett, Washington, where production had recently been cut from 1.5 aircraft per month to just 1.3. However, even if production were slowed to just one new aircraft per month, the 747-8 would still remain profitable.
The order could potentially have some bearing on future product decisions for Airbus, which is seriously considering whether to double down on the $25 billion investment they will never recoup on the A380 superjumbo.
Until very recently, Airbus lost money on every A380 sold. The last A380 sale occurred over two years ago, and Malaysia Airlines recently decided to sell or lease all six of their A380 aircraft. This adds supply to a market that has been totally devoid of demand.
Emirates, the single largest operator of the A380 with 60 aircraft in service and another 80 on order, has made no secret of their desire to purchase upgraded A380neo aircraft. An A380neo would feature new engines (“neo” stands for new engine option) to increase fuel efficiency by as much as 11 percent, and could also have an elongated fuselage to carry even more passengers and cargo. Even as Emirates has claimed they would order as many as 200 A380neo jets, Airbus is reluctant to invest in the research and development necessary to bring an upgraded superjumbo to market without the firm commitment of at least one other airline customer.
There has been speculation that if Airbus approves the A380neo, it could be the kiss of death for the 747-8 program. However, it could still be several years before an upgraded A380neo reaches the market, and an even larger A380 version would only compound infrastructure integration issues that the A380 already faces.
The multibillion dollar 747-8F aircraft order comes during a time of increasingly strained political tensions between Moscow and Washington. Russian aircraft have increasingly tested U.S. and NATO air defense networks, and just last week a Russian fighter interceptor came within ten feet of a U.S. electronic surveillance aircraft. While it may seem that relations between the U.S. and Russia get worse all the time, the situation would need to deteriorate to a much greater extent before vital capital expenditures such as widebody cargo aircraft were embargoed.
The Volga-Dnepr Group is a major player in the worldwide heavy air cargo market, and already operates six Boeing 747-8F freighters under the AirBridgeCargo Airlines flag. Their fleet also includes a mix of older 747-400F and -400ERF (Extended Range Freighter) aircraft, as well as three 737-400F jets. Boeing also maintains an office in Moscow called the Boeing Design Center, where Boeing employees collaborate with engineers and designers from Russian firms in support of the 747-8 family, among other projects.
Volga-Dnepr is well known for moving outsized cargo for many users in Antanov An-124 and Il-76 jets in addition to their aforementioned Boeing 747 and 737 freighter fleet. Many U.S. and NATO allies contract their services. Other key Volga-Dnepr clients include the oil and gas industry, the automotive industry, space industry, and aid relief missions.
Current 747-8F operators include CargoLux, Nippon Cargo Airlines, Cathay Pacific Cargo, Korean Air Cargo and Silk Way Cargo, among others. All of these current operators also have additional orders for 747-8F aircraft on the books with Boeing. With the world air cargo market on the upswing, it is possible that further 747-8F orders could materialize from these carriers.
In January 2015, the U.S. Air Force announced that the two VC-25A aircraft (developed from the early 80’s era 747-200B) serving as Air Force One when the President is aboard will be replaced with three 747-8I aircraft. These will undergo at least five years of extensive modification (including EMP shielding, defensive countermeasures, aerial refueling capability and an encrypted communications suite) once the airframe is complete and aren’t expected to enter service until 2023.
The Boeing 747 has been an American icon since its introduction into service, and it has been used (or considered for use) in a litany of interesting ways over the years. From a business jet to a water bomber to an airborne laser to an airborne telescope to an aerial refueling tanker to a cruise missile launcher to a doomsday plane to an engine test bed, the platform has demonstrated its versatility for almost half a century. Later this summer, a decommissioned 747 will serve as a party lounge and dance floor at Burning Man.
The success of Boeing’s sales team at the Paris Air Show this year could be seen as a testament to the quality and reputation of their flagship product. Imagining a future where new 747’s aren’t being built is hard to reconcile with a past in which the plane has been a constant in international airline fleets.
Photo credit: 747-8F AirBridgeCargo with lights - Aleksandr Markin/Wikicommons, 747-8F Korean Air Cargo in flight - Ken H./@chippyho/Wikicommons, A380 Emirates taxi with marshaller - Aaron M. Sprecher/AP, A380 Emirates taxi - Tony Avelar/AP, An-124 AirBridgeCargo taxi - Matthias Rietschel/AP, 747-8F Nippon Cargo taxi - Alec Wilson/Wikicommons, 747-8F Etihad Cargo in flight - Alec Wilson/Wikicommons