UPS order gives Boeing a lift
Global parcel company United Parcel Service gave a boost to Boeing’s fortunes with an order for 14 747-8 cargo jets worth US$5.3 billion at list prices. The order also includes options for 14 additional planes that UPS officials said was a sign of renewed cargo demand. The purchase adds significantly to Boeing's order book at a time when it and rival Airbus have struggled to sell widebody aircraft and is also a boost to the 747 programme, which Boeing had earlier warned could be shut down in the future if more orders did not materialise.
Boeing recently cut production of the plane, which has been flying since 1969, to six per year. Competition from similar-sized, two-engine planes that are more fuel efficient have cut into the 747s’ market. Boeing has said recently that it expects demand for the plane to recover as growth returns to the global cargo market. UPS CEO David Abney said "we have the demand and these aircraft will allow us to handle the demand on a very scheduled basis.” Boeing predicted 4.2 percent annual growth in air cargo traffic over the next 20 years, driven largely by e-commerce traffic and express delivery in China. "Markets linked to Asia will lead all other international markets in average air cargo growth," Boeing said, citing a need by 2035 for 550 large, 747-size freighters.