UPS places huge order for 747s, 767s in jumbo boost for Boeing Everett
UPS has ordered 14 additional Boeing 747-8F cargo jets, in addition to the 14 it ordered in 2016, and ordered four more 767 freighters as well, in a deal worth $7.3 billion at list prices.
by Andrew McIntosh , Staff Writer - Puget Sound Business Journal
Shipping giant UPS ordered 14 Boeing 747-8F cargo jets and four new Boeing 767 freighters on Thursday, saying it needs the 18 new aircraft to boost its air transport capacity amid surging global demand.
Worth $7.3 billion at list prices, the 18 new jets will join UPS' existing aircraft fleet and no jet currently flying is being replaced, UPS said in a news release.
The surprise 18 aircraft order is a boon for Boeing's Everett factories, where the two jets are made, and for companies in the Puget Sound region's supply chain that make parts for those two jets.
UPS said recent tax cuts adopted by President Donald Trump's administration generated major savings that will allow the company "to significantly increase capital investments and to make them earlier than previously planned."
A few years ago, Boeing had threatened to shutter the 747 program if it didn't get any new orders. With these new freighter orders, though, the 747 line in Everett will carry on for at least the next four years.
Delta Air Lines and United Airlines were the last U.S. carriers still flying 747 passenger flights, but both carriers have recently retired them. Some foreign airlines still fly the 747, known as the Queen of the Skies, such as Air China.
Boeing spokesman Doug Alder said UPS had acquired options to buy the 14 additional 747s when it placed its prior 747 order for 14 jumbos in October 2016, and has now decided to exercise them.
Atlanta-based UPS said Boeing has agreed to deliver the new aircraft "on an expedited schedule." All 32 of the jets will be delivered between now and the end of 2022, giving UPS more than 9 million pounds of extra cargo capacity.
David Abney, UPS chairman and CEO, said demand for next day and deferred air shipments is expanding to record levels in the U.S., adding: "UPS’s international segment has produced four consecutive quarters of double-digit export shipment growth.”
UPS Airlines President Brendan Canavan said the new freighters will allow UPS "to continue upsizing aircraft on routes and will create a cascading effect that will boost capacity on regional routes around the world.”
Air cargo demand has grew by 9 percent in 2017, more than double the 3.6 percent notched in 2016, in what was the strongest growth the industry has experienced since 2010.
UPS’s global airline network includes more than 500 owned and leased aircraft. The shipping giant received three new 747-8 freighters in 2017.
“UPS has clearly tapped into the power and efficiency the 747-8 Freighter brings to the market,” Boeing Commercial Airplanes president and CEO Kevin McAllister said. “We’re impressed with how UPS is leveraging the airplane in its operations and excited to see them bring additional 767s into their fleet.”
The 747-8 freighter carries 46 shipping containers and has a cargo capacity of 307,600 pounds, or approximately 30,000 packages. It has a range of 4,200 nautical miles.
The Boeing 767 freighter has cargo capacity of 132,200 pounds and 31 air containers. Its range is about 3,000 nautical miles. UPS now operates 59 Boeing 767s.