Atlas Air Worldwide on Tuesday announced the order of two 777 freighters from Boeing in response to strong demand for international e-commerce shipping, one of the few areas of strength in a freight market that has bottomed out after 18 months of decline and led airlines to reel in expansion plans.
The two new 777 cargo jets, which were booked in October, are expected to be delivered in the second half of 2024. Atlas Air and joint venture Polar Air Cargo operate 116 aircraft, including the largest fleet of Boeing 747 jumbo freighters in the world as well as about a dozen 777s, according to the company. Atlas has a handful of passenger aircraft used for charter customers.
Top customers include Amazon, DHL Express, the U.S. Department of Defense, Alibaba’s logistics arm Cainiao and global logistics giant Kuehne+Nagel.
Atlas Air also flies four 777 freighters for MSC Air Cargo, the startup airline from Mediterranean Shipping Co. that entered the market in late 2022. Atlas Air ordered the aircraft, which are painted in the MSC brand, from Boeing in 2021. Three aircraft have been delivered so far, with the fourth long-range freighter scheduled for delivery in December.
“We are excited to add these aircraft to our leading world-class fleet. These come at a time when retirements of older widebody freighters will significantly increase and when the introduction of new widebody freighter capacity will be limited. We have a deep pipeline of prospective customers interested in these 777 freighters, and we’re confident in our ability to place them under long-term agreements,” said Atlas Air CEO Michael Steen.
Atlas became privately held earlier this year when investors led by Apollo Global Management bought the company for $3.2 billion plus debt.
Airfreight volumes are about 6% lower than 2022, year to date, after being down more than that most of the year and about 3% below levels in 2019, a weak year for cargo demand.
The downturn has taken the wind out of factory manufacturing and passenger-to-freighter conversions, with Boeing only notching eight orders for freighters — all 777s — so far this year, including the two from Atlas. Last year, airlines ordered 35 freighters from Boeing, including 10 medium widebody 767-300s. Boeing recorded 42 freighter orders in 2021 and 17 in 2019, a slow year for the cargo industry, according to the company’s online database.
Aftermarket overhaul specialists have also seen a sharp drop in new orders, and many all-cargo operators have paused plans to add aircraft. This year Canada’s Cargojet stopped pursuit of four 777 converted freighters, Air Canada dumped an order for two 777 production freighters, bankrupt Western Global Airlines backed out of a similar order and lessor Air Transport Services Group said it will postpone sending six 767s to specialty shops for conversion as more of its customers get cold feet.
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