Boeing pushes a new generation of large freighters Qatar Airways tens of billions of scale order support

After rapidly deteriorating relations with Airbus Europe ("Airbus") and the extremely rare cancellation of an order by a manufacturer, Qatar Airways ("Qatar Airways") responded quickly by signing a huge order for up to 100 aircraft with Airbus rival Boeing Civil Aircraft Group ("Boeing").

Boeing's counterattack

Boeing and Qatar Airways announced the official unveiling of its new generation of large cargo aircraft products, the 777-8F, as a match for Airbus' launch of the A350F large cargo aircraft product at the end of last year, Qatar Airways supported a total of up to 50 aircraft (34 confirmed orders and 16 options, including some airliner orders converted), catalog price of more than $20 billion.

This most valuable cargo aircraft order in Boeing's history injected more confidence into Boeing's competition for the next generation of large freighters, and also made Airbus's plan to seize Boeing's market share in the cargo aircraft field directly into the difficult mode as soon as it started.

On January 31, local time, during the high-level visit of the Qatari government to Washington, including representatives of the two governments, Boeing, Qatar Airways and engine supplier General Electric Aviation Group and other parties attended the signing ceremony of the purchase agreement, in addition to the 777-8F order, Qatar Airways also signed an order with Boeing for a total of 737-10 narrow body aircraft (25 confirmed orders and 25 option rights) and 2 777F freighter orders.

According to the public catalog price, Qatar Airways' "New Year's Gift Package" to Boeing is nearly $30 billion from the order catalog price, even if the purchase discount is taken into account and the value of the confirmed order is only calculated for the time being, boeing has obtained about $3.8 billion in new reserve orders, which is a positive sign for the aircraft manufacturer that lost more than $4 billion last year from the beginning of the year and is expected to continue to improve its financial situation in the new year.

According to the earnings report released at the end of last month, Boeing achieved positive cash flow in the fourth quarter of 2021, which is also the first time since the 737MAX ban in the first half of 2019. Revenue in 2021 reached $68.3 billion, up 7% year-over-year, and while there is still a net loss of $4.3 billion, it has narrowed significantly from $11.9 billion in the previous year.

As demand for air cargo continues to rise during the COVID-19 pandemic, Boeing, which has a huge advantage in the freighter market, has gained a lot. According to the IATA's global air cargo market data, air cargo demand for the whole year of 2021 increased by 6.9% over 2019 and 18.7% from 2020, and since the IATA began cargo reporting in 1990, this demand growth rate is second only to the 2010 growth rate (20.6%) and 8.9 percentage points higher than the global cargo trade growth rate (9.8%). Insufficient available capacity still drives profit and revenue growth, supporting airlines and some long-haul passenger services in the face of declining passenger revenues. In December 2021, freight rates were almost 1.5 times higher than in 2019.

Direct competition in the freighter market

Boeing's large freighters and authorized modified freighters have won a large number of new orders during the pandemic, and according to Boeing Civil Aircraft Ceo Stan Deere, Boeing provides 90% of the world's dedicated freighter capacity, and with the pressure of global supply chains and high demand for e-commerce, the performance and capabilities of the fleet are more important than ever.

But for Boeing, there is a hidden danger under the huge advantage, that is, boeing freighter platform history is relatively long, according to the new carbon emission standards of the civil aviation industry to be implemented in 2028, Boeing's current freighters will not be able to adapt to the new rules and stop production, while Airbus is a derivative model launched on the basis of a younger platform, which can better adapt to the new emission regulations, which is also a major breakthrough in challenging Boeing's authority in the freighter market.

Whether from the perspective of product data or market targets, the Airbus A350F and 777-8F will become the most direct competitors.

From the technical parameters announced so far, the A350F has a maximum structural payload of 120 tons and a cargo compartment volume of 24,500 cubic feet. Boeing said the 777-8F will be the industry's largest and longest-range twin-engine cargo aircraft, with a maximum structural payload of 130 tons and a cargo hold capacity of 27,000 cubic feet. In terms of vehicle load, the two models are similar.

In terms of range, Airbus said the A350F has a range of about 5,400 miles under maximum payload, compared with 5,100 miles for the 777-8F. Boeing said it would fly farther if the 777-8F load was reduced to the same data as the A350F. However, there can often be a discrepancy between the range on paper and the actual effect, so it is difficult to tell which aircraft type has the advantage.

However, according to the research and development plan, the A350F will be put to market two years earlier than the 777-8F, which also means a head start for the aviation industry, which has a rapidly changing market environment.

Since its launch last year, Airbus has received new orders for 22 A350Fs, which would have been a good start without Qatar's start-up order for the 777-8F. But considering that Kahang, which is keen to buy a new Airbus model, was also a potential customer of the A350F, is it a bit sloppy for Airbus, which intends to challenge Boeing's position as the king of freighters?

The conflict has widened

Air Kagawa and Airbus first went to the British court last year because of the damage to the paint of the A350 series aircraft, and the most recent conflict was that Airbus recently declared an A321neo order signed with Air Trucker many years ago to be invalid, which led to the fact that Qatar Airways failed to receive two A350-1000 aircraft in accordance with the contract last year. Continuing to go back is the root of the problem, Qatar Airways has been publicly announcing since last year that it has grounded more than twenty A350 series aircraft due to problems such as aging fuselage paint, and asked Airbus to solve these problems.

In fact, this new generation of large jet airliners, which are mainly constructed of composite materials, is not the first time that the paint has been encountered, but only Qatar Airways has negotiated with manufacturers in a drastic way to solve the problem. This may also have something to do with Air Kagawa's controversial CEO, Akbar Al Baker, who often expresses his opinions or criticisms of issues in the aviation industry in a unique way, such as the fact that many years ago he publicly expressed his intention to "buy an aircraft manufacturer" because of his dissatisfaction with the manufacturer's production capacity. ”

This is also not the first time That Qatar airways has declined to accept Airbus' new aircraft, although the two sides have maintained a close relationship for nearly a decade, operating almost all of Airbus' aircraft to date and being the first airline in the world to operate the A350 series, with a total of more than 60 aircraft in the series, making it the world's largest operator of the A350 family. Air Kagawa also currently operates more than 100 Airbus aircraft, including the A320, A330 and A380, accounting for almost half of its fleet.

In this dispute over the A350, according to several relevant statements sent by Airbus to the China Times reporter from the end of last year to the beginning of this year, there are "persistent misrepresentations" about the A350 paint problem for "a customer" and have "conducted a thorough assessment of the relevant findings of the surface paint of the A350 aircraft, which was also confirmed by the European Aviation Safety Agency (EASA), which it believes has no impact on the airworthiness of the A350 aircraft." ”

Qatar Airways also responded by posting a video on social media, in which the paint surface of the aircraft and the paint around the rivets did have more obvious cracks and peeling marks. In an official statement, Qatar Airways said the flaws were not superficial and revealed that the court had decided to speed up the issue, ordering hearings in April in an effort to get the dispute resolved more quickly.

In a recent online interview, IATA Chairman Willie Walsh told The China Times that it was paying strong attention to the airbus-Qatari conflict, saying, "I don't want to think that there is a company (manufacturer) that is using its current market advantage to handle customers", while describing Airbus's cancellation of Qatar airways aircraft orders as a "rare situation" and a "worrying development". He said that in the past, there were cases where customers could not afford the cost of aircraft orders and canceled, but Qatar Airways clearly did not have this problem.

The A321neo is Airbus' best-selling narrow-body aircraft to date, and airlines have been ordering the aircraft in large quantities before and after the pandemic, so even without Qatar Airways' 50 orders will have little impact on its market prospects.

Despite strong dissatisfaction with Airbus' operation, Qatar Airways ordered the 737-10 from Boeing, which is close to the A321neo market positioning, and as the largest model in the MAX family, the 737-10 can carry up to 230 passengers and fly up to 3300 nautical miles in a single cabin configuration.

Responsible Editor: Huang Xingli Editor-in-Chief: Han Feng