16: Boeing's Freight Dominance Faces Tests

Air freight giants reconsider their options as Boeing navigates 777 program delays.

Oct 21, 2024

210000Z OCT 24

Good morning, and thanks for joining us for another issue of Flightlines.

The aviation industry is facing continued difficulties this week. The ultra-low-cost carrier (ULCC) model is showing signs of strain, with Spirit Airlines on the hunt for new financing. Meanwhile, Boeing is working to resolve issues with labor to get production back on track.

But it's not all turmoil. This week we feature one of Boeing's bright spots: their freighter business. Cargo aircraft have been a steady performer for Boeing, with their aircraft making up the majority of the world's freighter fleet. We'll take a look at their market position and the challenges on the horizon, giving you a clear picture of their place in the industry.

In this issue of Flightlines:

✈️ Feature: Boeing's Freight Dominance Faces Tests

📍Routes of note

Qatar Airways is reducing Jakarta service in the first quarter of 2025.
Korean Air is expanding Seoul to Manila service from late November 2024.
Uzbekistan Airways is resuming Lahore service from November 2024.
SAS is adding A330 operations between Copenhagen and Oslo in November.

🗞️ In the news

Boeing and Machinists union reach a tentative agreement, averting further production delays and securing workforce stability. A final vote on the deal is expected next week.
FAA opens a new three-month safety review into Boeing’s processes, focusing on the company’s adherence to safety standards amid heightened scrutiny following previous incidents.
Spirit Airlines delays $1 billion debt refinancing deadline, providing short-term financial relief as the low-cost carrier navigates ongoing market challenges and liquidity concerns.

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Boeing's Freight Dominance Faces Tests

While Boeing has faced turbulent times in its passenger aircraft business, with high-profile issues plaguing models like the 737 MAX, in the world of air cargo, the American aerospace giant still garners unquestioned respect. Boeing has enjoyed a commanding lead in the freighter market for decades, with its aircraft forming the backbone of fleets for cargo giants like FedEx, UPS, and Emirates SkyCargo.

Turkish Airlines Celebrate the Airline's First 777 Freighter. Photo by Boeing.

Boeing's success in this arena isn't a matter of chance. The company's foresight in designing aircraft with both passenger and cargo variants in mind has paid dividends. From the versatile 767 to the massive 747 with its iconic nose door, Boeing has consistently delivered aircraft that meet the evolving needs of the air cargo industry.

The numbers tell a compelling story. Boeing's 777F, a freighter version of its popular 777 passenger jet, has garnered 380 orders since its introduction. The older but still relevant 767F continues to roll off production lines, testament to its appeal to cargo operators. Even as the passenger variant of the 747 is phased out, its freighter variant continues to be viable.

Boeing’s 50th 777 Freighter takes off from Paine Field in Everett. Photo by Boeing.

Boeing's dominance, while robust, faces challenges on multiple fronts.

Airbus, Boeing's perennial rival, has awoken to the potential of the freighter market. The European manufacturer's A350F, based on its fuel-efficient A350 passenger jet, promises to be a strong competitor in the market. With a payload capacity of 120 tons and an impressive range of 4,700 nautical miles, it's positioned to compete directly with Boeing's offerings.

Additionally, the air cargo market itself is evolving. E-commerce growth and the increasing need for speedy deliveries are changing what is typically shipped via air freight. This shift might favor smaller, more flexible aircraft over the large wide-bodies that have led to Boeing's dominance.

Air France’s Boeing 777 Freighter Arrives at Paris Air Show. Photo by Boeing.

Boeing isn't resting idle, though. The company is developing the 777-8F, a next-generation freighter based on its 777X platform. This aircraft promises even greater efficiency and capability. However, delays in the 777X program have pushed its entry into service to 2028, giving competitors time to gain ground.

These delays haven't gone unnoticed, with customers like Emirates being notably vocal about their frustration. Emirates Airline President Tim Clark recently criticized Boeing over the cumulative six-year delay to the 777X program, highlighting the real-world impact of these setbacks on Boeing's relationships with major clients.

As Boeing navigates these challenges, it does so from a position of strength. Its deep understanding of the cargo market, long-standing customer relationships, and proven track record are significant advantages. Yet, the company can't afford complacency. The next few years will be crucial as Boeing works to maintain its lead. —✈

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Let's explore this week's noteworthy events that are shaping the future of air travel.

Routes of note

The most significant new routes and service changes this week, offering insight into strategic expansions and market shifts.

🇰🇷 Seoul (ICN) – 🇵🇭 Manila (MNL) via Korean Air, November 2024
Korean Air's expansion of service between Seoul and Manila, adding more capacity from late November 2024, reflects growing demand for travel between South Korea and the Philippines. This move highlights Manila's importance as a key destination for Korean tourists and business travelers. The increased frequency will likely enhance connectivity for passengers flying to other parts of Southeast Asia and could intensify competition with budget carriers on the same route.
🇵🇰 Lahore (LHE) – 🇺🇿 Tashkent (TAS) via Uzbekistan Airways, November 2024
Uzbekistan Airways' resumption of Lahore service from November 2024 is a strategic reopening of a key South Asian route. This could boost business and tourism ties between Pakistan and Uzbekistan and strengthen connectivity to Central Asia. It may also offer new opportunities for trade and economic cooperation between the two countries, positioning Tashkent as a regional hub for Pakistani travelers.
🇩🇰 Copenhagen (CPH) – 🇳🇴 Oslo (OSL) via SAS, November 2024
SAS's decision to operate A330 aircraft between Copenhagen and Oslo marks a significant capacity upgrade on this short-haul route. The introduction of wide-body aircraft could respond to strong demand for travel between these Scandinavian capitals and increase the potential for onward long-haul connections. This move may also be a test for future wide-body deployments on other regional European routes, as SAS adjusts its fleet utilization strategy.
🇮🇩 Jakarta (CGK) – 🇶🇦 Doha (DOH) via Qatar Airways, Q1 2025
Qatar Airways' reduction of Jakarta service in the first quarter of 2025 indicates shifting demand on this route, possibly due to evolving travel trends in Southeast Asia or competition from other Gulf carriers. While this reduction may ease pressure on competitors, it could also signal adjustments in Qatar Airways' broader network strategy as the airline balances capacity across its extensive global operations.

In the news

The latest and most impactful stories shaping the world of commercial aviation this week.

OCTOBER 18TH, 2024

United Airlines announces massive international expansion for summer 2025 - Flightradar24
United Airlines revealed plans for one of its largest international expansions, adding new routes to Europe, Africa, and Asia for summer 2025. The expansion includes services to Croatia, Taiwan, and Senegal, reinforcing United's strategic push into new long-haul markets.

OCTOBER 19TH, 2024

Spirit Airlines delays $1 billion debt refinancing deadline - Simple Flying
Spirit Airlines has pushed back the deadline for its $1 billion debt refinancing, offering short-term financial relief as it struggles to regain stability in a highly competitive low-cost carrier market. This delay provides the airline with more time to address liquidity challenges and restructure its debt.
Boeing and Machinists union reach a tentative agreement to end strike - Skift
Boeing and the Machinists union have reached a tentative deal to end the ongoing strike, which has been affecting aircraft production. A final vote on the agreement is set for next week, which, if ratified, will help resume normal operations and avert further production delays.

OCTOBER 20TH, 2024

FAA To Open New 3-Month Safety Review Into Boeing - Simple Flying
The FAA has initiated a three-month safety review into Boeing’s manufacturing processes, focusing on the company’s safety procedures. This review follows concerns over Boeing’s adherence to safety protocols and could lead to further regulatory action.
United Airlines Inks Deal For 40 Leased Airbus A321neos - Simple Flying
United Airlines has firmed up an agreement to lease 40 Airbus A321neo aircraft, aligning with its long-term fleet renewal strategy. The A321neo offers improved fuel efficiency and range, enhancing United's capacity to expand its international and domestic operations.