FedEx Express has placed an order for 24 new freighter aircraft from Boeing in the latest show of strength in the cargo sector.
The global transport company has ordered 12 767 freighters and 12 777 freighters, it was announced on Tuesday (US time).
It is the world’s largest operator of both the 767 and 777 freighter.
“We are taking another positive step in our fleet modernization program as we add more efficient, lower emission aircraft to our global fleet,” FedEx Express chief executive David Cunningham said in a statement.
“The Boeing 767 and 777 freighters have brought greater efficiency and reliability to our air operations.
“The 777, with its tremendous range characteristics, has allowed us to provide faster transit times around the globe. We are excited to add more of these aircraft to our fleet.”
FedEx Express, whose fleet comprised more than 660 aircraft, said in its latest quarterly results the 777 freighters would be delivered between 2021 and 2025. The 767 freighters would arrive between 2020 and 2022.
“These aircraft will be used to continue to improve the efficiency and reliability of the FedEx Express aircraft fleet,” FedEx Express said.
It would also allow the company to “take advantage of the capital expensing benefits” of the recent tax changes in the United States, FedEx Express said.
The 767 freighter is based on the 767-300ER (extended range) passenger jet and was able to carry about 52.7 tonnes of revenue cargo with intercontinental range”, according to Boeing figures.
Meanwhile, the was able to fly 4,900nm with a payload of 102 tonnes. The aircraft’s range allowed FedEx Express to transport goods from its Memphis hub to cities in Asia with nonstop flights.
Boeing Commercial Airplanes president and chief executive officer Kevin McAllister said the FedEx Express repeat order for more 767 and 777 freighters was a “big vote of confidence in Boeing’s market-leading freighter family and the long-term outlook for air freight”.
The order is also a boost to Boeing’s 777 program as it prepares to feed in production of its new 777-X into the final assembly line currently churning out 777-300ERs and 777 freighters. (There are no outstanding orders for the 777-200LR.).
The 777-9X is due to enter service in 2019 and the 777-8X to follow in 2022.
In April, Boeing said it planned to increase the production rate of the 767 from 2.5 aircraft to three aircraft a month, beginning in 2020, in response to increase demand from freight and military customers.
In addition, FedEx ordered a dozen 767 freighters for delivery between fiscal 2020 and 2022, vindicating Boeing’s decision to increase production of that jet by 20 percent from 2.5 to 3 jets per month beginning in 2020.
FedEx Express’s order follow’s United Parcel Service’s (UPS) decision in February to exercise options to purchase 14 747-8Fs it held from a previous order made in 2016, citing “unprecedented demand”.
Cargo sector expected to post four per cent growth in 2018
Figures from the International Air Transport Association (IATA) showed air cargo demand, measured by freight tonne kilometres (FTK) rose 9.7 per cent in calendar 2017, compared with the prior corresponding period.
“Cargo demand has benefitted from the largely unexpected acceleration in the growth of the global economy over the past year,” IATA explained at the recently concluded annual general meeting in Sydney.
“As businesses rushed to respond, they turned to air transport to replenish inventory, producing strong air cargo growth in 2017.”
IATA has forecast FTK growth of four per cent in calendar 2018, as that restocking of inventories cycle ran its course.
Although the figure represented a more than halving of growth from what was achieved in the previous year, IATA noted the expected four per cent growth was in line with 20-year trends, with pharmaceuticals, e-commerce and other premium cargo services are expected to lead growth in the current year.
Further, cargo yields were expected to improve by 5.1 per cent in calendar 2018, compared with 8.1 per cent in the prior corresponding period.
“Airline CFOs and heads of cargo reported in April that they were very positive about future growth in air travel, and were also positive about cargo,” IATA said.
“This reflects a more general optimism amongst business worldwide about economic prospects. Consumer confidence has risen too.
“Despite the threats of trade war, the easing in fiscal policy as well as still loose monetary policy is producing stronger economic growth and a cyclical revival in world trade.”
Boeing said this latest order, which was yet to be added to the company’s orders and deliveries website, meant it had sold more than 50 freighter aircraft so far in calendar 2018.