While the Boeing 787 Dreamliner was a huge hit amongst airlines and the manufacturer had no issues selling the aircraft throughout the first two decades of the 21st century, the situation has shifted. Now, as the world has entered the third decade of the century, the sales campaign has slowed down.
In 2020, Boeing only amassed 29 orders for the wide-body, in addition to 44 orders that were lost due to accounting adjustments. The backlog has shrunk to 469 aircraft and the production rate of the 787 could shrink further as international travel is yet to recover. To further add a bump in the road in terms of the 787 sales, Norwegian announced that it would end long-haul flying, returning more than 30 Boeing 787s to the market on January 14, 2021.
Thus, an abundance of Dreamliners does beg the question – what to do with them? While there could be some airlines willing to take some of the ex-Norwegian jets, it is highly unlikely due to the current downturn in international travel. So, lessors who owned 26 ex-Norwegian 787s and the low-cost carrier itself will have to come up with solutions to remarket the wide-bodies. After all, these are not old or run-down aircraft that are at the end of their life cycle – they have plenty of “juice” remaining.
But could they be converted to freighters – and not just by taking seats out of them? Is it possible that Boeing would introduce a cargo-dedicated Boeing 787F to the market?
While the idea could sound great on paper as it would significantly bolster Boeing’s sales pitch of the 787, there are technical challenges that would be associated with converting a Dreamliner to a freighter.
For example, a cargo door would force Boeing to make adjustments to the fuselage. “The consequence [of a cargo door – ed. note] is that the loads that would normally pass across the cut-out need to react differently and, inevitably, the skin and local fuselage structure will need reinforcing. This is the same for both metal and composite,” told AeroTime News Jerrod Hartley, the Chief Executive Officer (CEO) and Chief Engineer at Airframe Designs, a United Kingdom-based company that specializes in stress analysis on aircraft.
Several challenges would be associated with the fact that the fuselage is composite. “The loading of the local section of the fuselage in and around the new cut-out would prove problematic,” added Hartley. While that is the same for a metal-based fuselage, confusion arises due to the cargo door itself. “If the door is metallic then a consideration for thermal expansion needs to be included in the design and certification owing to the fact that it is being integrated with a composite fuselage,” further commented the engineer.
“If composite, then a non-Original Equipment Manufacturer (OEM) would need to use materials that can be certified using a (very costly and time-consuming) building block approach to material qualification with consideration to such things as allowable strength properties, which are affected by temperature and moisture, lighting strike protection and damage tolerance,” he explained.
Furthermore, the paint scheme of the aircraft, the complexity of the structural repair manual and an ultimate and separate fatigue test would possibly be required by the authority, which would be “performed under hot or wet conditions – the test is more challenging than metallic structure tests,” noted Hartley.
Further complexity would be added if, for example, the cargo door were alloy. “Usually, the door would only need to react to the pressure differential and this is the same for metallic structure.”
“If the door is alloy and the fuselage composite then high loads at the interface between the door and fuselage may be generated owing to the difference in coefficients of thermal expansion and the changes in temperature experienced by the airframe,” stated Hartley. The high loads would, of course, reduce the expected life-span of the potential freighter.
Boeing freighter lineup
Nevertheless, when one takes a glimpse at Boeing’s freighter lineup, there is a clear gap in terms of the manufacturer’s cargo aircraft capabilities.
Currently, Boeing produces several wide-body freighters, namely the 747, the 767 and the 777. The company also has supported passenger-to-freighter conversion programs for the 747-400, the 767 and most recently, the 777-300ER.
The 747-400 has two main disadvantages when it is converted to a freighter. First things first, the feedstock for conversion is constantly going down, as fewer and fewer 747-400s are being released into the second-hand market and are now scrapped instead. The reason could be the fact that along with the 747, many airlines have retired their 767 and 777 aircraft, which are much more efficient due to the simple fact that they have two engines fewer, thus operators are more than happy to take the latter two, rather than the former.
In addition, converted freighters do not have a nose cargo door, unlike the 747F, and can only be loaded via a door on the side of the fuselage. Not only does it eliminate the possibility of loading unique shipments in terms of their physical dimensions, but also negatively impacts the turn-around times (TAT) at an airport. According to one promotional Boeing video, done in partnership with Cargolux, the nose cargo door reduces the TAT by “a minimum of half an hour,” indicated Guy Gerling, Cargolux Director of the Luxembourg hub.
The 747-8F, which Boeing will continue to build until 2022, has not exactly been the most popular aircraft. Despite it being launched on the back of two cargo airlines, including the aforementioned Cargolux, only 106 dedicated freighter Queens will be built by the time Boeing completes the production run of the aircraft. While it does carry the same General Electric GEnx engines as the 787 Dreamliner, it carries twice as many – the argument of two versus four engines comes up again, especially if one were to compare the 747-8F to the 767F or the 777F.
While the end date for the 747 production is set, the same could not be said about the 767 or the 777. The former is still produced exclusively as a freighter or a military aircraft (KC-46), while the latter is produced both as a passenger and a cargo jet.
There is little doubt that if Boeing were to announce a passenger-to-freighter conversion program for the 787, the value of that aircraft would skyrocket in the customers’ eyes. Ordering a new aircraft, which can be converted into a freighter, leaves plenty of options for an airline at the end of a plane’s life. In addition, for Boeing, a 787F could potentially help solve a couple of issues with its product lineup.
When one looks at the current Boeing freighter line-up, there is a clear gap between the 777F and the 767F. The 767-300ER BDSF, while an improvement over the native 767 cargo aircraft, does not resolve the issue. Seemingly, if the manufacturer were to release a new wide-body freighter, it would need to perfectly fit in in the 80-ton maximum payload range and cover that area in order to not cannibalize sales of other aircraft and provide a unique solution to the market. Whether the market sees a need for such an aircraft is another question altogether. However, what airlines, including cargo operators, always strive for is cost savings – and the 787 definitely does offer that.
After all, Boeing has called the Dreamliner the “most innovative and efficient airplane family flying today.” Compared to the 767-300 or the 777-200LR, on which the respective freighters are based, the 787-9 is a very competitive aircraft in terms of its performance and efficiency. For example, according to the International Council on Clean Transportation’s (ICCT) calculations, the Boeing 787-9 averages around 42.5 passenger-kilometers per liter of fuel on transatlantic routes. Meanwhile, the 777-3000ER, which has a 14 ton higher MTOW compared to the 777-200LR and utilizes the same GE90-115B engines, averages around 36 passenger-kilometers per liter of fuel on the same routes.
In terms of specifications, the Boeing 787-9, by far the most popular version of the Dreamliner family, is fairly similar to the 777F in terms of its dimensions. It is only 1 meter shorter and 0.4 meters narrower than the 777F.
However, the question remains how much payload a 787-9F would be able to carry. Comparing the 777-200LR and the 777F, which is based on the former, Boeing increased the Maximum Zero Fuel Weight (MZFW) by 39 tons or 18.6%. As a result, the 777F is certified to carry a maximum payload of up to 102 tons, albeit with a slightly lower range. If the Seattle-based plane maker were to increase the maximum payload capacity for the 787-9F to around the 80 tons range, it would also have to increase the MZFW for the aircraft. However, Boeing had a lot to play with the 777F, as the gap between the MTOW and the OEW of the base model for the freighter was 202.3 tons. Because the OEW depicts weight including all the necessary equipment to operate an aircraft, there is little wiggle room there – as depicted by the little difference of the OEW between the 777-200LR and the 777F.
For the 787-9F, the gap between the MTOW and OEW is smaller and comes out at 125.2 tons. If Boeing were to plug its gaps with an 80-ton cargo maximum payload aircraft, the 787-9F would need to bolster its maximum payload by at least 27.5 tons, leaving the wide-body jet with only 45.2 tons of extra weight without fuel. As a result, the aircraft range would suffer. The largest version of the Dreamliner family, the 787-10, offers little improvement in terms of leeway to maximize payload – while it is certified to carry almost five additional tons (57.2 tons), its MTOW is the same as the 787-9’s.
At the same time, a Boeing 787 opening its fuselage cargo door and carrying freight is a distant future.
Boeing had a troubling 2020, to say the least, in terms of finances and its commercial aircraft programs. While the Boeing 737 MAX has been slowly ungrounded throughout the past few months, both the 777X and the 787 programs suffered severe issues. The 777X was delayed to at least late-2023, including a $6.5 billion pre-tax charge on the program, while the 787 ran into severe production issues in H2 2020. So much so, that the manufacturer only delivered four Dreamliners in the last quarter of the year. Thus, the company already has plenty on its plate, including headaches in other programs, like the KC-46, or the fact that Boeing has amassed $63.6 billion of debt by the end of the year.
Developing a freighter program for the 787 would not only cost a pretty penny but also would take time. According to an Aeronautical Engineers spokesperson, which specializes in passenger-to-freighter conversions, the process to obtain a Supplemental Type Certificate (STC) for a conversion can take up to between three to four years alone. Furthermore, there’s the cost between researching and developing a technologically complex solution to open up the fuselage to facilitate the cargo door. While Hartley explained that “if there is a significant market for such an aircraft type,” then Boeing would be willing to capitalize on it and “work with a preferred supplier or strategic partner to off-load the design and certification as an STC package that can be sold as an option via Boeing,” the chief executive of Airframe Designs shared his thoughts.
Even then, the Boeing 787 Dreamliner could simply be too young of a program to even consider launching a conversion at this point. The Airbus A321P2F could serve as a perfect example here: launched in June 2015, it was first announced in 2009, when the European manufacturer announced that it had completed the technical definition of the program.
“When we were developing the A320P2F [the A321P2F was also included in the program – ed. note] if we had gone through to the completion of it, it would have been the most wonderful, most beautiful, most performing P2F program that you could ever imagine,” commented the now-retired Airbus Chief Operating Officer (COO) Tom Williams in June 2015. “At the time [when Airbus first announced the A320P2F program – ed. note], the residual values of A320s were really running against us in terms of finding enough feedstock [for customers to be able to purchase the converted freighter at an appropriate price]”, added Williams.
In 2009, the A320 was almost 21 years old, as it first flew passengers of Air France in 1988. The A321 made its debut six years later, meaning it was celebrating its 15-year-anniversary when Airbus first mulled the P2F program for its leading narrow-body program.
At its current stage, the 787 is almost 10 years old and is certainly nowhere near the end of its lifespan for Boeing to invest resources in a conversion program. After all, travel is set to recover sooner than later and the “787s and A350s remain desirable assets over the longer-term,” was concluded in a KPMG report on the airline industry.
“There has been a wholesale move to take the 747s, 757s, 767s, A380s, A340s, and the very old A330s out of the passenger business,” Carlyle Aviation President Robert Korn was quoted in the report. This was reflected by aircraft values. For example, a 10-year-old Boeing 777-300ER value fell from almost $73 million in January 2020 to around $40 million by the end of the year, according to Ishka data. Even then, the 777-300ER was previously handed a lifeline by Israel Aerospace Industries (IAI), which launched the conversion program for the aircraft in October 2019. The first delivery of a converted 777-300ER is expected to be in 2022.
The 777 argument
While second-hand Boeing 777 aircraft values have dropped significantly since January 2020, the manufacturer is still producing the Triple Seven – and is set to release the 777X in the near future.
However, the entry into service date of the 777X has been pushed back several times. First, it was the General Electric GE9X engine, which exhibited issues in its high-pressure compressor. GE was forced to make design changes to the component, delaying the first flight of the aircraft, as the engine was yet-to-be certified at that point in May 2019. The folding wing-tip aircraft was supposed to make its maiden flight in the summer of 2019, yet that was pushed back to at least the fall. Eventually, the 777X would make its first flight in January 2020, when the world had already begun to change and Boeing already delayed the aircraft’s first delivery date to early-2021 in October 2019.
Delays have followed the 777X since, as the wide-body’s commercial service entry date was set back to late-2023. Boeing was forced to take a $6.5 charge, its first on the program.
“Our decision to implement certain modifications to the aircraft design has added time to the schedule and results in additional costs,” commented on the 777X’s progress Chief Financial Officer (CFO) of Boeing Greg Smith during the company’s Q4 2020 financial results call on January 27, 2021. According to Smith, two additional elements resulted in the forward-looking charge. For one, an assessment of the current market situation and airline willingness to take delivery of the 777X and secondly, adjustments to planned production rates and the removal of 50 aircraft from the 777X’s backlog, resulting in a total of 350 firm orders.
However, a Securities and Exchange Commission (SEC) filing by Boeing on February 1, 2021, indicated that the backlog was further shrunk from 350 to 191 aircraft. No production rate cuts were announced for the Boeing 777 line and the combined rate for the 777/777X remains at two per month.
As of December 31, 2020, Boeing has 58 unfilled orders for the 777-200LR, 777-300ER and the 777F. With a production rate of two per month, the planemaker has enough backlog to build the older versions of the Triple Seven until mid-2023. The timing could be perfectly suited to fully transition to the 777X.
At the same time, there is a lot of uncertainty regarding the market situation and the certification process of the 777X. David Calhoun, President and CEO of Boeing, indicated that the delay of the first delivery of the 777X was a result of “updated assessment of global certification requirements, the latest assessment of COVID-19 impacts on market demand, and discussions with our customers with respect to delivery timing.”
Avoiding a void
Thus, there could be a lot of ongoing uncertainty regarding the actual date of the first delivery. If the aviation market continues to struggle, especially with demand for international travel, or the certification process drags on, Boeing could face a situation where the 777 production line could be in a void. With the entry into service date of the 777X too far off, and with no older-generation Triple Sevens to build, the dilemma then would be what to do next with the production line? Does Boeing continue to take parts from suppliers, build aircraft and spend cash without the ability to recoup it in the short-term?
With the company’s finances in a fragile position, including the fact that Boeing expects to become cash positive only in 2022, according to Smith, building aircraft and spending resources without being able to deliver them is not exactly an attractive proposition. While the 777X will replace the older 777s to carry passengers, a freighter version of the former has not yet been announced. As a result, the sales campaign of the 777F remains of the utmost importance to reduce the uncertainty regarding the program. If Boeing were to launch a 787F that could potentially divert attention from the Triple Seven. Furthermore, the same cash problem argument once again stands up against the launch of the 787F.
So, while an argument to convert the low-cost carrier’s Boeing 787s could be made, the timing is still not here yet. The former Norwegian aircraft still have plenty of years of flying passengers in them and could instead be snapped up by an airline that anticipates growth in the short-term future. However, not all hope is lost to see a 787F. According to the Aeronautical Engineers representative, the Dreamliner was “designed with a freighter variant/conversion in mind and as such the engineers took this into account when designing the structure and systems.”