Atlas Air Boeing 747-8F N852GT inside the Boeing Factory.
More troubling news for Boeing’s 747-8 Freighter program today. Atlas Air has announced that they have terminated orders for three Boeing 747-8Fs, “due to delays and performance considerations.” The three aircraft they cancelled are test aircraft that end up being less efficient than later 747-8Fs produced.
Jim Proulx with Boeing communications told Business Week that Atlas Air’s decision is ’œabsolutely unrelated’ to Cargolux delaying their first 747-8 delivery. ’œThough the first airplanes off the line are slightly short of expectations, these early-build models nonetheless will be great airplanes with unparalleled efficiency and low costs. As with all programs, we’ll continue to focus on performance improvements that increase the value these airplanes will bring to our customers.’
Atlas Air will still received nine 747-8Fs through 2013.
William J. Flynn, President and Chief Executive Officer of Atlas Air Worldwide, said via press release that, ’œAs prudent asset managers, terminating the first three aircraft was the right decision for our fleet, our customers and our stockholders. We expect the remaining 747-8Fs in our order to be better-performing aircraft than those we have terminated.”
The first three 747-8Fs delivered to Atlas will be contracted out to British Airways, where the next two will enter service with Panalpina. With the additional new 747s, Atlas plans to retire five of their Boeing 747-200s that they currently operate.
This comes on the heels of Atlas Air’s stock dropping 13%, after an analyst downgraded their shares from “buy” to “neutral.” The concern stems from the down economy. Could this have been less about the efficiency differences of the 747-8F or a good excuse for Atlas to take delivery of less aircraft without penalty?
There is still no word on when Cargolux will take delivery of their two Boeing 747-8Fs.
UPDATE 1:
Jim Prouix with Boeing Communications explained what Boeing is currently planning to do with the three aircraft involved in Atlas’ change of contract to AirlineReporter.com. “We are working to place the airplanes with other customers.”
Prouix also reiterated that Boeing’s dealings with Cargolux and Atlas are separate. “The decisions by Atlas and Cargolux were independent and involved distinct contracts and issues. We continue to work through unresolved contractual issues with Cargolux and look forward to delivering its airplanes.”
In March 2010, Atlas Air started operating the Boeing 747 Dreamlifters. It was strongly suspected that this deal was part of a compensation package to Atlas for the delays of the Boeing 747-8F. Boeing stated that “Atlas’ Dreamlifter contract is not at issue in this matter.”
Image: Jon Ostrower
The Boeing 747-8F is delayed. Will the 787 go to ANA before the 747-8F goes to Cargolux?
As of now, the Boeing 787 Dreamliner is scheduled to be delivered to All Nippon Airways (ANA) on Monday September 26th. The first Boeing 747-8F was scheduled to be delivered to Cargolux on the 19th, but as of now has little hope of being delivered this week.
So that raises the question: which aircraft do you think will be delivered to their customer before the other? The 787 or the 747-8F?
[poll id=”6″]
If you are viewing this on my Seattle PI or Reuters syndications, you might need to go directly to AirlineReporter.com to vote.
Image: 747-8 belongs to flypdx
We still do not know much about what has caused Cargolux to pull out of taking delivery of their first new Boeing 747-8Fs.
As announced last week, Cargolux refused to take delivery of their first two Boeing 747-8 Freighters. They were supposed to take delivery of their first one yesterday and their second one tomorrow, but at this point no one is sure when the deliveries will occur.
Not many people are talking about what is going on. Boeing told me via email, “Nothing new to report. Same status as Friday,” which means, “We have unresolved issues between ourselves and Cargolux. We are working with our customer to determine a date for delivery.” Luckily for us, some journalists have received “insider” information that puts some light on what is going on between Boeing and Cargolux.
At the beginning of this controversy, some thought this might have something to do with the Boeing 747-8F not living up to performance expectations. It appears that performance issues might have something to do with this, but it might be more politically motivated.
Scott Hamilton, with Flightglobal, is reporting that Qatar Airways, who recently purchased a 35% stake in Cargolux, is requiring additional compensation for delays to their Boeing 787 Dreamliners. Previously Qatar and Boeing had an agreement on that compensation, but it appears that Qatar might be looking for a better deal. According to Hamilton’s sources, “Qatar’s chief executive Akbar Al-Baker views the compensation for Cargolux as setting a benchmark for the sum due for the delays to Qatar’s 787s.”
Hamilton is also reporting that that another, unnamed, Boeing 747-8F customer is looking for changes in their contracts. Originally they were slated to take delivery of the first test aircraft (presumably at a lower price), but now are wanting aircraft that will not require re-working after they take delivery.
It seems unlikely that this dispute would only revolve around the Boeing 747-8’s performance issues, since Boeing has been forthcoming about the aircraft’s additional weight for quite some time. In an email to the Puget Sound Business Journal Boeing stated, “It’s misleading to say we missed our specifications. After we set our original specification, we completely redesigned the wing, which is significantly heavier, but more than makes up for that in increased aerodynamic efficiency and lower fuel burn.’
In a press release, issued by Cargolux, they confirmed that they are working with Boeing to resolve contract issues, but are ready to move forward with leasing additional aircraft if needed. “In the event that the issues cannot be resolved in a timely manner, Cargolux will source alternative capacity to fully meet customer demand and expectations ahead of the traditional high season.”
Jon Ostrower on Flightglobal is reporting that delivery of Cargolux’s two 747-8Fs during the week of September 19th-24th is, “highly unlikely.” It doesn’t seem anyone (even Boeing and Cargolux) are sure when the aircraft might be delivered.
Yesterday, Brandon Farris caught a Cargolux Boeing 747-400 landing at Seattle-Tacoma International Airport (SEA). It is not unusual to see Cargolux aircraft at SEA, but the timing was a bit off from when they usually fly in. This particular aircraft runs between Mexico (MEX), Atlanta (ATL), New York (JFK), Houston (IAH), and Luxembourg (LUX), but not Seattle. I assume that this 747-400 picked up cargo at SEA that the first Cargolux Boeing 747-8F was supposed to deliver to Luxembourg (where Cargolux is head quartered).
At first, it appeared that Boeing might come off looking like the bad one in this conflict, but if the rumors of Qatar Airways strong arming Boeing into a better deal for the 787s at the expense of Cargolux not receiving their 747-8Fs, then Boeing might not coming off looking so poorly.
I will be sure to keep you all updated as new information surfaces.
UPDATE 1:
Guy Norris, with Aviation Week, goes into detail on what the Boeing 747-8F is lacking as far as performance (thanks @mtrumpbour for pointing this out). He states that there is a 2.7% greater fuel burn than expected. GE is working on a fuel savings package for their GEnx-2B engines on the 747-8F, but those will not be completed until 3rd quarter 2013 and are only expected to improve fuel consumption by 1.6%.
Norris states that Qatar Airway’s deal to purchase a 35% stake occurred in June, 2011, but it took three months to be ratified by the governments of each country. This happened only a few days before the 747-8F deliveries were to take place.
Ostrower, who is currently in Seattle for the 747-8F delivery, caught Boeing doing some interesting 747-8F moving around today at Paine Fieldand posted on his Flickr.
UPDATE 2 9/21 7:30am:
Matt Cawby with KPAE Blog is reporting that one of Cargolux’s Boeing 747-8Fs (LX-VCB) went on a customer test flight, meaning the airline’s pilots were on board. This normally is a sign that Boeing is getting close to delivery. Cawby is hearing rumors that the first aircraft might deliver Tuesday September 27th.
Firdaus Hashim on Flighglobal is reporting that Cathay Pacific Airways is “satisfied” with their 747-8Fs, which they are expected to take delivery of in October. “Cathay Pacific’s commercial arrangements with all its suppliers, including Boeing, are confidential. However, we are satisfied that our commercial arrangements with Boeing take account of the known and disclosed specification and performance characteristics of the aircraft,” said Hong Kong’s flag carrier in a statement.
Thanks to Marshall Autry (Vintage Racer) for letting me use his photo.
The date was set. RSVPs were sent out. Engine displays were moved. All to prepare for Boeing’s first delivery of their 747-8F to Cargolux. But now it will all have to wait.
At 9:30am on Monday, September 19th, Boeing was to hand over the first 747-8 to Cargolux and the cargo operator was going to fly the plane from Paine Field at about 11am. Now, Cargolux has stated they will not take delivery of their aircraft and the delivery celebration will need to be re-scheduled.
Cargolux Boeing 747-8F
’œWe have unresolved issues between ourselves and Cargolux,’ Boeing spokesperson Jim Proulx said. ’œWe are working with our customer to determine a date for delivery.’
According to Max Kingsley-Jones with Flight Global, this could be a disagreement on the two companies’ contract. The aircraft was supposed to be first delivered about two years ago, but has run into a series of different issues. Kingsley-Jones states, “The Cargolux row is understood to centre on the 747-8F’s non-compliance with contractual guarantees, suggesting that it is connected in some way to the performance issues.”
Could this have been a game of corporate chicken? No matter who is at fault, this surely does not look good for Boeing. Their 787 and 747-8F programs have been delayed and this month they had delivery dates set for both aircraft (the 787 Dreamliner is scheduled to be delivered on Sept 26th). Now, right before the finish, Boeing is given yet another delay. Media from around the world are in process of flying into Seattle for the delivery ceremony scheduled for just a few days away. Instead of headlines about Boeing finally delivering their 747-8F, now the headlines will talk about another delay.
Now the question is valid once again: what will deliver first? The 747-8 or the 787?
UPDATE:
Boeing’s Randy Tinseth has updated his blog stating, “We still need to work through some contractual issues with our customer Cargolux, so first delivery won’t take place as scheduled on Monday. Employee and media events for next week have also been postponed.”
UPDATE 2:
Jon Ostrower on his Flight Blogger site is reporting that Boeing 747 vice president and general manager Elizabeth Lund stated in an internal letter, “Earlier today we received notification from our 747-8 Freighter launch customer Cargolux that it would not take delivery of its first airplane on Monday. We are working closely with Cargolux to determine the delivery dates for both its first and second airplanes… I am disappointed to have to share this information with you. I remain confident that we will work through these issues and look forward to celebrating the delivery of this great airplane with you.”
UPDATE 3 (9/17 11am PT):
According to David Kaminski-Morrow with Flight Global, Cargolux has stated, “”In the event that the issues cannot be resolved in a timely manner, Cargolux will source alternative capacity to fully meet customer demand and expectations ahead of the traditional high season.” Kaminski-Morrow also stated that Cargolux Board of Directors made this decision during a meeting on September 16th due to “unresolved contractual issues.” Financing for the two Boeing 747-8Fs have been put on hold.
There is a lot of talk on the internet as well about the fact that Qatar Airways recently purchased 35% of Cargolux and created a new board of directors. There could be some issues that the new board disagree with and were looking to get more from Boeing. At this point since neither side is saying much more on why the deal was stopped last minute, there are just a lot of rumors and speculation. I would imagine other Boeing 747-8F customers have picked up the phone to ask Boeing why this deal has not gone through.
UPDATE 4: New post created
This story will be updated as new information is given
Photo by moonm
The new Final Assembly Building in South Carolina
Boeing has been busy this week releasing one important press release after another. I am a little behind still, so I decided to put them all in one easy to follow blog to keep everyone updated:
BOEING OPENS NEW SOUTH CAROLINA 787 FINAL ASSEMBLY BUILDING
Boeing has officially opened the second location where the Boeing 787 Dreamliner will be built – North Charleston South Carolina. Although the 787 is a bit behind schedule, the new facility was completed six months ahead of its origional schedule. The final assembly of the first South Carolina-built 787 Dreamliner will begin later this summer. Once up and running, the facility is expected to produce three 787 Dreamliners per month.
The new Final Assembly building encompasses 642,720 square feet and used one million cubic feet of concrete. Compare that to the Boeing Factory in Everett, WA being 4,299,967 square feet.
BOEING STARTS SHARING ON FLICKR
If you read the blog, you know I have loved following Boeing through their social media exploration. Not too long ago, they started a YouTube account adn now they have started Flickr — be sure to follow.
AIRCRAFT DELIVERY MILESTONES
This week Boeing delivered their 50th aircraft to Egyptair and their 275th Boeing 737 Next Generation to GE Capital Aviation Services (GECAS). Boeing also delivered Angola Airline’s first 777-300ER.
BOEING 747-8F FLYING TO PARIS ON BIOFUEL
This will be the first time that an airliner has flown across the Atlantic Ocean using BioFuel. Boeing pilots Capt. Keith Otsuka and Capt. Rick Braun and Cargolux Capt. Sten Rossby will fly the airplane with each of the 747-8 Freighter’s four GE GEnx-2B engines powered by a blend of 15 percent camelina-based biofuel mixed with 85 percent traditional kerosene fuel (Jet-A).
BOEING EXPECTS DEMAND FOR 33,500 NEW PLANES OVER NEXT 20 YEARS
That is a lot of moola — about $4trillion to be exact. Boeing forcasts that the world fleet will double by 2030 and obviously want to get in on the action. Boeing is concentrating on growth in China and India with most new aircraft deliveries taking place in Asian Pacific countries.
Image: Boeing
