On Thursday, the company confirmed that an order for four of its 747-8F freighters was cancelled, and on Friday Boeing said the cancellation came from Japan’s largest cargo carrier, Nippon Cargo Airlines. The company had already scheduled a production cut on its 747-8 from 1.5 new planes per month to 1.3. The cut is set to take effect this month.
The International Air Transport Association (IATA) reported in early August that year-to-date growth in the freight market through June had slowed from 5.8% in 2014 to 3.5% this year. North American carriers experienced a decline of 3.3% in June 2015 compared with June 2014, while capacity has risen by 2.8%. For the first six months of the year, North American freight traffic is down 0.4%.
According to World ACD, the volume of air cargo transported in July rose a scant 0.7% month over month, and both revenues and yield continue to slide. The index readings were the worst so far in 2015.
ALSO READ: What Does a Boeing 777-9X Cost?
The World ACD data were reported early last week. The volume (weight) index rang in at 116.2, the revenue index totaled 95.9 and the yield index, a measure of the average price paid by customers to transport one ton a distance of one mile, came in at 82.5. The indexes are moving averages for the past 12 months and are based on a value of 100 assigned at the end of 2008.
In addition to slower growth, the market for freighters also is being held down by the increase in freight carried on scheduled passenger flights. A Boeing 777 passenger plane can carry up to 7,120 cubic feet of freight, as well as a full complement of 386 passengers.
This is not exactly a new development. A report from Bloomberg last year noted that the previous 50/50 cargo split between freighters and passenger planes has dropped to around 40% for freighters and could be on its way to 30% as more wide-body planes are added to carriers’ fleets.
At the end of August, Boeing reported unfilled orders for 13 of its 747-8Fs, 79 of the 767-300Fs — all from FedEx Corp. (NYSE: FDX) — and 48 of the 777Fs. That total for the 747-8F is now nine.
ALSO READ: Boeing Builds a Drone Killer
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
