While Airbus always went head-to-head with Boeing in regards to the production of passenger aircraft, cargo aircraft painted a stark contrast between the two companies. However, a new freighter by the European manufacturer could break that dominance, as reportedly, an Airbus A350F might be on the horizon.
The A350F, which Airbus is pondering to manufacture, according to a report by Reuters, would directly compete with the Boeing 777F. The Triple Seven freighter is part of a freighter line-up that allowed Boeing to dominate the air cargo industry with its products.
Overall, the US manufacturer managed to deliver 544 of wide-body freighters since 2000, including the 747-400F and 747-8F, 767F and the aforementioned 777F, not accounting for converted freighters programs. Furthermore, Boeing has 94 unfilled orders for its twin-aisle cargo aircraft, as of February 28, 2021.
Meanwhile, Airbus delivered a total of 142 aircraft, comprised of 104 A300s, as confirmed to AeroTime News by the manufacturer’s representative, and 38 A330F aircraft ‒ its only active production freighter. But the aircraft has had neither an order nor a delivery since February 2017, when Airbus delivered an example of the cargo wide-body to Turkish Airlines, according to planespotters.net. According to a representative of Airbus, around 200 A300s and 30 A310 aircraft were actively operated as of March 2021, in addition to 38 cargo-dedicated A330s. A further 10 A330 aircraft underwent passenger-to-freighter conversion, per planespotters.net. Thus, the total fleet of Airbus wide-body freighters is around 382 aircraft.
Will the Airbus A350F be the key that unlocks the door to the freighter market for the European conglomerate?
Opportunistic or shifting winds?
2020 brought a lot of doom and gloom to the aviation industry. Yet for cargo operators, the year once again brought back hope and most importantly, more yields.
With the majority of wide-body passenger aircraft grounded throughout the year, the cargo industry was deprived of capacity as most of the world’s cargo travels in the bellies of passenger aircraft. In fact, 50% of the world’s freight travelled in the belly holds of aircraft, according to Lufthansa Consulting data. By February 2020 that began to shift and by April 2020, belly capacity reached its lowest point, only accounting for 12% of the total air freight capacity.
Meanwhile, cargo aircraft thrived. With demand for Personal Protective Equipment (PPE) during the first few months of the pandemic, and later the aforementioned capacity crunch, yields shot right up. “Air cargo is surviving the crisis in better shape than the passenger side of the business. For many airlines, 2020 saw air cargo become a vital source of revenues, despite weakened demand,” summarized the year International Air Travel Association (IATA)’s Director General Alexandre de Juniac in February 2021.
All in all, 2020 saw a 48% increase in cargo aircraft utilization compared to a year prior. Meanwhile, narrow-body and wide-body aircraft saw 588% and 686% fewer utilization, shows data by the International Civil Aviation Organization (ICAO).
The question remains whether cargo will remain such a cash-cow side of airline operations going forward – after all, the de Juniac summed up 2019 for the cargo industry as “the worst year for air cargo since the end of the Global Financial Crisis in 2009.”
Perhaps it will subside, but the trend of consumers shopping for goods online has only increased. According to Eurostat, between 2010 and 2019, the turnover from e-sales has increased from 13% to 20% in the European Union (EU). The number should only increase, as most countries have put “a large share of traditional brick-and-mortar retail virtually on hold, at least temporarily,” as the Organization for Economic Co-operation and Development (OECD) pointed out. According to the organization, the current pandemic has only expanded the scope of e-commerce, as “transactions in many countries have partly shifted from luxury goods and services towards everyday necessities, relevant to a large number of individuals.”
“Some of these changes in the e-commerce landscape will likely be of a long-term nature, in light of the possibility of new waves of the epidemic, the convenience of the new purchasing habits, learning costs and the incentive for firms to capitalize on investments in new sales channels,” as outlined in the report by the OECD.
“It is hard to predict the next few years in terms of cargo demand. However, recent surveys suggested that more shoppers have converted from physical high-street to online shopping, which could be an indication of switching consumer behavior and a further boost to e-commerce,” Pierre Van Der Stichele, the Cargo Director at Chapman Freeborn, told AeroTime News.
“Year on year, the UK market alone saw an increase of 74% of shopping online up to January 2021 partially due to shops having to close following social distancing guidelines, with similar increases echoed in other countries,” Van Der Stichele added. According to the Cargo Director, e-commerce only grew by 25% year-on-year prior to the pandemic, showcasing how much of an inadvertent helping hand the pandemic has provided for the e-commerce business.
Demand for freighter aircraft
While the future of e-commerce is seemingly bright, how does the future of the air cargo market look like?
In Boeing’s latest Commercial Market Outlook (CMO), the aircraft manufacturer envisioned that between 2020 and 2039, the air cargo industry would see 2,430 freighter deliveries, 930 of those being of wide-body aircraft, while the rest would be passenger-to-freighter conversions.
Even despite a challenging 2019, the air cargo remained “a key element of global trade,” highlighted Boeing. “The value of air cargo to world trade has been further highlighted during the COVID-19 pandemic, as the need to ship critical medical supplies and equipment quickly, securely and over long distances has been underscored through 2020,” read the company’s CMO. Furthermore, Boeing predicted that air cargo was set to grow by 4% over the next 20 years and the growth would be led by East Asia and the ever-growing e-commerce.
Overall, the air freighter fleet was set to grow from 2,010 aircraft in 2019 to 3,260 by the end of 2039, according to the manufacturer, representing a 62% growth over the time period. Out of those 3,260 jets, 850 were predicted to be the > 80-tonne freighters, namely the 747-8F and the 777F. Neither the A330F (Max payload 70 tonnes) or the A300F (54.6 tonnes) are close to that mark. This could be the area that the A350F could exploit, as the 747-8F production run is coming to an end in 2022, when the last Queen will be handed over to Atlas Air.
However, the question then remains whether the Boeing 777F and the Airbus A350F could co-exist, considering that the same 747-8F will fly for decades to come. For example, the aforementioned Atlas Air had an average fleet age of 25 years at the end of 2019, according to the Bureau of Transportation Statistics (BTS). FedEx and UPS, two other major cargo airlines in the US, had aircraft that were on average 25.5 and 16.8 years old.
Thus, not only the A350F will have to compete with the Boeing 777F for new orders, but also with older customers of the 747-8F. Yet on the horizon is an additional inadvertent helping hand for the A350F, courtesy of the International Civil Aviation Organization (ICAO). In March 2017, the ICAO Council adopted a new aircraft emission standard with the goal to reduce the environmental impact that the aviation industry had on the environment.
In a new Volume III to Annex 16 of the Chicago Convention, the organization introduced a new emissions standard for newly-manufactured aircraft. The new emissions standards is applied to newly-designed aircraft starting from January 1, 2020, while airplanes produced prior to the date will have the standard applied to them starting from January 1, 2023. “Those in-production aircraft which by 2028 do not meet the standard will no longer be able to be produced unless their designs are sufficiently modified,” read the announcement by the ICAO.
As a result, starting from 2028, the Boeing 777F line could be forced to be switch off, as the freighter could potentially not meet emissions standards. While currently the General Electric GE90 that powers the 777F is compliant with Volume II, Volume III could be a whole different story. For example, the GE-90-115B has a carbon monoxide emission index (CO EI) of 34.58 (grams-of-emissions-per-kilogram-of-fuel-burned (g/kg). The Trent XWB-97, the most powerful engine in the Trent XWB family that powers the Airbus A350 aircraft, has a CO EI of 7.74 (g/kg), per the European Union Aviation Safety Agency (EASA) data.
777F vs 777X-F vs A350F
At the same time, Boeing could fire back with the dedicated freighter with its newest iteration of the Triple Seven, the 777X. While the US manufacturer has not officially indicated whether a folding-wingtip freighter will come to the market, customers have pleaded publicly for Boeing to introduce it. One example could be Qatar Airways and its chief executive Akbar Al Baker, who has urged Boeing to launch a 777X freighter. When the Qatari flag carrier ordered five 777Fs during the Paris Air Show in June 2019, Al Baker remarked that the airline “would also like to be the launch customer, because of the confidence” Qatar Airways had in Boeing.
“Hopefully, Boeing will launch a 777X-based freighter,” Al Baker said.
Possibly the manufacturer will do so, as the company was talking with its 777F customers “in terms of when they would like us to bring that composite-wing freighter,” at the time stated Boeing’s Senior Vice-President of commercial sales and marketing Ihssane Mounir, as reported by FlightGlobal.
Time is ticking for all three aircraft, namely the 777F, the 777X-based freighter and the A350F. While the current cargo Triple Seven is an undisputed heavyweight champion, the 777X-F and the A350F could be coming for the belt. However, the Airbus aircraft will be the underdog in the fight, as the 777F and the 777X-F would be very similar, including the fact that Boeing applied for 777X type certificate as a derivative of the 777, slashing introductionary and operational costs for airlines. Thus, Airbus could be facing a monumental sales fight, with the question of whether both the Airbus A350F and Boeing 777X-F could co-exist together profitably.