The Farnborough International Airshow kicked off today, with Boeing’s 777 Freighters pushed to the limelight as logistics and airline companies finalized their orders for fleet expansion. The 777 Freighter is an all-cargo version of the 777-200 longer-range Worldliner passenger liner. Boeing rolled out the first 777 Freighter in 2008, and the aircraft's sales have been going strong ever since.
The aircraft manufacturer had been in talks with DHL Express on a deal for the 777-F, which was made official today as the logistics major placed an order for 14 of the cargo planes, while also signing down options and purchase rights for seven more 777-Fs in the future. The first four planes are expected to be delivered by 2019.
“The acquisition of the 14 Boeing airplanes reflects a gradual replacement of our older intercontinental fleet. As the most fuel-efficient, most reliable freighter type with the best long-haul range, these aircraft will contribute to our emissions reduction targets and allow us to serve even more markets with non-stop flights,” said Ken Allen, CEO of DHL Express.
“DHL was an early adopter of this type of aircraft for the logistics industry and took delivery of the 3rd B777F produced by Boeing in 2009. With extensive experience operating this freighter type, it has proven to be superior in all aspects of operation making it a logical choice.”
The air freight market is witnessing burgeoning growth now, after crossing the usual ebb in rates at the start of the year, registering huge year-on-year gains since May. The Hong-Kong to North America route saw rates of $3.80 per kg this June, a year-on-year increase of 16% from $3.27 per kg last June. With environmental bodies sounding the alarm bell on fuel efficiency and emissions, it is vital for companies like DHL Express to look into replacing the older variants on their fleets with the technologically advanced models.
Long-haul range flights are integral to the growth of logistics majors as e-commerce has evolved to capture a substantial chunk of the market. The e-commerce market is touted to expand with double-digit growth figures across most of the developing countries like India, China, and Brazil over the next decade, with global sales expected to grow to $4.14 trillion by 2020.
DHL estimates that by replacing the older aircraft with the 777-F, the company would reduce its CO2 emissions by 18% which would help it inch towards the goal of reducing emissions from logistics-related operations to zero by 2050.
In the wake of the DHL Express order, Qatar Airways has also placed an order of five 777-Fs at the airshow, with the deal being valued at $1.7 billion. “I am delighted to be further enhancing our cargo fleet and adding five Boeing 777 Freighter aircraft,” said Akbar Al Baker, the CEO of Qatar Airways Group. “In the past 15 years, Qatar Airways Cargo has grown steadily and globally, becoming the third largest in the world.”
Since 2009, Boeing has sold more than 180 777-F aircraft which accounts for an overwhelming 98% of the market share. It has also delivered 140 of those aircraft which represents 92% of the deliveries market share. The 777-F has a payload capability of about 110 tons and can fit 27 standard pallets on its main deck with ten more pallets in the lower cargo hold. Boeing’s stronghold of the air cargo market boils down to its longer range, improved fuel capacity, and increased load capacity - which would mean more haulage, lesser stops, and lower landing fees - leading to significant bottomline savings for aircraft carriers.
Stay up-to-date with the latest commentary and insights on FreightTech and the impact to the markets by subscribing.