The demand for air cargo space is growing stronger in 2022 as belly hold services are still not fully functional because of the grounding of several passenger planes. As stated by the President of FedEx, “As passenger travel remains depleted, air cargo capacity will be constrained through 2022 all while the demand for goods is likely to grow.” Against this backdrop, Boeing has launched the 777-8 freighters to cope with the rising space demand from the air cargo sector. In today’s blog, we are going to talk about the launch of new freighters by Boeing and its implications for the air freight forwarders.
Boeing launches 777-8 freighters in a bid to meet the growing space demand of the air freight sector
Boeing has designed its new freighters in a way that will maximize energy efficiency and environmental sustainability. There are substantial enhancements in designs. Moreover, they implemented new technologies to create a carbon-fiber composite wing and more energy-efficient engines. The range of 8,167 Km and a payload of 118 tones makes it ideal for use in long-haul routes. In other words, it will allow air freight forwarders to keep the landing fees low by making fewer halts on the long-haul routes.
The new freighters come with the cutting edge technology and proven performance of the 777 freighters. Additionally, the 777-8 freighter aircraft will be the biggest, long-range freighter that the air cargo industry has ever seen. It will come fitted with twin-engines and offer similar payload capacity as the 747-400 freighter. Moreover, the 25% improvement in fuel efficiency, operating cost, and emissions, is an extra bonus that will further help to keep the freight rates low. Simply put, the new freighters by Boeing will result in more lucrative and sustainable operations for air freight forwarders.
Boeing will start manufacturing the freighters at its factory in Everett, Washington. They have invested over $1 billion in this manufacturing unit to sustain production of the new freighters for many years to come. We can expect the new freighters to ply the skies by 2027.
Qatar Airways signs for 34 freighters worth over $20 billion
Qatar Airways has placed an order for 34 freighters along with 16 purchase rights options. This order is by far the largest freighter commitment in the history of Boeing. Additionally, the order supports numerous suppliers from all over the USA. The production of the freighters will provide 35,000 jobs and will come with a financial impact of approximately $2.6 billion. Furthermore, as a part of the contract, Qatar Airways will transform twenty of their sixty 777x freighters to 777-8 freighters. They have also purchased two current 777 freighters to meet the ever-increasing demand for cargo space.
Boeing and Qatar Airways signs an MoU
Boeing and Qatar Airways have signed an MoU. To quote the Boeing CEO Stan Deal, “Our team is ready to create an airplane that will serve them well for many decades. Qatar Airways’ selection of the efficient 777-8 Freighter is a testament to our commitment to provide freighters with market-leading capacity, reliability and efficiency.” The contract was cemented during a formal signing event at the White House on the 31st of January. This event was attended by the CEOs of the two conglomerates along with other dignitaries.
Boeing which supplies a whopping majority of global freighter capacity is trying to improve the capacity and capability of its fleet in a time when the international supply chain is reeling under the pressure of high demand for e-commerce. The order will give the much-required boost to Boeing operations. In the last few years, they lost a substantial part of their overall market share to Airbus. Nevertheless, Boeing continues to be the market’s favourite supplier of freighters. The rift between Qatar and Airbus has allowed Boeing to gain a competitive advantage.
“Boeing has a long history of building market-leading freighter aircraft, and Qatar Airways is honoured to have the opportunity to be the launch customer for the 777-8 freighter…We certainly push Boeing hard to deliver upon our expectations, and the team at Boeing consistently strives to meet and exceed our expectations, giving the opportunity for us to launch the most significant new freighter aircraft for a generation,” says Al Baker, Group Chief Executive of Qatar Airways.
The launch of the new freighters is one significant step towards mitigating the problems of the air freight sector
Qatar Airways’ move to expand its air cargo fleet is a direct consequence of the strong demand for cargo space. Just two weeks back, IATA released data demonstrating how the demand for air freight rose by 6.9% in the last year. As per a recent report by IATA, “The lack of available capacity contributed to increased yields and revenues, providing support to airlines and some long-haul passenger services in the face of collapsed passenger revenues.”
Moreover, the increased reliance on e-commerce and the crisis of the ocean shipping sector has jeopardized the stability of the air cargo industry. The launch of the new freighters by Boeing is also an answer to the launch of A350 freighters by their competitor Airbus in 2021. Apart from Qatar, Boeing has several orders for the 777-8 from other airlines like British Airways, Emirates, Etihad, Singapore Airlines, Nippon Airways, and Cathay Pacific.