Boeing’s 747 jumbo snags a $5.3 billion lifeline from UPS1 min read . Updated: 27 Oct 2016, 09:52 PM IST
UPS . is ordering 14 Boeing 747-8 airplanes and holds options for another 14 of the air freighters
Atlanta/Chicago: United Parcel Service Inc. (UPS) is ordering 14 Boeing Co. 747-8 airplanes and holds options for another 14 of the air freighters, tossing a lifeline to the venerable jumbo jet.
The deal is valued at $5.3 billion based on list prices, before discounts that are customary for aircraft purchases, and may provide the first signs of an air-cargo recovery that would spur demand for the iconic hump-backed plane dubbed the “Queen of the Skies".
UPS will deploy the front-loading cargo planes on international routes while shifting some earlier-model 747s to domestic flying, the Atlanta-based courier said on Thursday. The jets, which will be delivered over a three-year period starting 2017, will begin a “cascade" of aircraft-route reassignments that will add significant capacity to the company’s busiest lanes.
“UPS is making several strategic capital investments for increased global operating capacity," chief executive officer David Abney said in a statement.
The order is the largest Boeing has landed for the redesigned 747 since November 2007, according to Boeing’s website. It gives new credence to Boeing’s forecast of a late-decade replacement cycle for older air-cargo jets, which may revive the half-century-old 747 programme.
Boeing had only netted three orders for the 747 this year. The sale almost doubles Boeing’s current backlog of 15 unfilled orders for the plane, according to the Chicago-based manufacturer’s website.
Sales have dwindled for the four-engine 747 and Airbus Group SE’s A380 superjumbo as passenger carriers shifted long-range flights to more fuel-efficient twin-engine jets. The company said in July it was slowing 747 production output to six a year and would have to end the program if new orders didn’t materialize. Bloomberg