Saturday, October 8, 2016

747’s survival rests on Russian cargo firm

Russian carrier AirBridgeCargo, the customer Boeing is counting on to keep the 747 alive, flew a new 747-8 freighter airplane from the Everett plant Friday to begin service at Sea-Tac Airport.

The Russian cargo airline keeping Boeing’s 747 jumbo jet program alive flew a new 747-8 freighter plane Friday from the Everett plant where it was built to Seattle-Tacoma International Airport, where it began service.

The AirBridgeCargo (ABC) jet was greeted with a water-cannon salute and welcoming speeches, celebrating the airline’s launch late last month of twice-weekly scheduled service out of Sea-Tac.

“This is the best cargo plane in the world,” Alexey Isaikin, president of ABC parent company Volga-Dnepr Group, said in an interview. “I believe in the future of this airplane. I hope the program continues.”

With serious doubt about how long Boeing will be building its most recognizable plane, Isaikin’s support is critical.

Volga-Dnepr Group now owns 18 of the jumbo jets, including 10 of the latest 747-8F model. It has 15 more on order.

Sales of widebody jets have slowed dramatically this year, though a segment of the market was lifted by Qatar Airway’s 40-plane order for 787s and 777s earlier on Friday.

The downturn is deeper for the 747, for which Boeing last month slowed the production rate to a crawl of just one plane every two months.

Ideal for carrying big cargo shipments with its signature nose opening, the 747 depends for further sales almost exclusively on the air-cargo market, which has been in a prolonged slump since the global financial crisis hit eight years ago.

Hendrik Falk, ABC vice president for the Americas, said that though the carrier’s business has been hit, it maintains a long-term perspective and is expanding its network.

It opened its first North American hub in Chicago in 2011, added Dallas in 2014, Los Angeles and Atlanta last year, then Houston and now Seattle this year.

Falk said the two flights per week in and out of Sea-Tac will carry a lot of aerospace-industry cargo for Boeing and its suppliers, and even for Airbus.

Friday’s cargo underscored that point: heavy stands used to transport 787 engines to Boeing and now being returned to the Rolls-Royce plant in Singapore, as well as aircraft seats made in Washington state en route to Europe to be installed on Airbus jets, said Jerry Chavez, ABC’s executive director for North America.

ABC is seeing signs of the typical year-end uptick in demand as consumer goods such as iPhones and computers are shipped from Asia to North America for the Christmas season.

However, next year “is a crystal-ball topic,” Falk said. “We’re hoping 2017 will be a stronger year.”

Boeing will second that.

 
The jet maker’s website lists just 14 unfilled firm orders for the 747. But that includes four for bankrupt Russian carrier Transaero, and two for Nigerian carrier Arik Air, which doesn’t want to take them.

That leaves probably just eight truly firm orders on Boeing’s books, including one for ABC.

Falk said Friday that the airline’s commitment at the Farnborough Air Show earlier this year to take 15 more 777 freighters is solid, though only one is reflected in Boeing’s order book.

ABC will take two of the aircraft per year, he said.

So provided the orders Boeing is relying on survive, it can plausibly count on delivering another 26 airplanes. Depending on the scheduled delivery dates, that could stretch out the program to the end of the decade.

By then, Boeing will be building another two or three highly customized models to serve as Air Force One planes for the president.

 
Falk said the plane delivered Friday, like ABC’s previous 747-8 deliveries, was financed by Boeing through its Boeing Capital unit.

That may reflect the current unavailablity of U.S. Export-Import Bank financing, which is stalled by inaction in the U.S. Senate.

It does underline the unusual effort Boeing has to expend to keep this jet program going.


(Dominic Gates - The Seattle Times)

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