Will Shippers Miss The British Airways 747?

British Airways' decision to immediately chop all 31 Boeing 747-400 jumbo jets from its fleet represents a sizable loss of future cargo capacity until the global economy returns to normal. But their eventual replacement with newer, more fuel-efficient, planes better suited for cargo will likely benefit airlines and shippers over time.

Passenger airlines, struggling to make ends meet, are accelerating the retirement of large aircraft already targeted for replacement because of higher operating costs, including greater fuel burn, crew size, and maintenance. In late May, Air France-KLM permanently ditched its nine remaining Airbus A380 super-jumbo jets. Earlier, Lufthansa decommissioned five 747-400s, six A380s, and other aircraft, while Delta plans to ditch 18 Boeing 777s by year's end.

"From before COVID to probably two years from now, there's probably going to be a net loss of total international belly capacity available in the market, fewer routes, and fewer frequencies in service. All of that will be the result of fewer passenger flights flying. But for those that are flying, I think there will be a net gain in cargo availability per flight," said Jesse Cohen, an air cargo consultant based in Chicago. "So it will still represent an efficiency for the cargo business."

But short term, for high demand markets, "there could be a squeeze and the rates could go up, no question."

Operating Costs

The four-engine 747-400s cost significantly more to operate than modern, twin-engine aircraft. British Airways' decision to part with the aircraft underscores the extent to which airlines are slashing costs amid the devastating travel downturn caused by the coronavirus pandemic. 

Airlines are not expecting international passenger business to fully rebound for at least three or four years. Airlines lose money when load factors aren't high enough to cover operating expenses. They can't afford partially full planes that are expensive to fly.

British Airways IAG, the largest operator of 747s in the world, was slowly phasing out the planes as they reached the end of their working life to helping meet the company's commitment for net-zero carbon emissions by 2050. The airline has invested heavily in modern, long-haul aircraft, including six A350s and 32 Boeing 787s, which are about 25% more efficient than the 747.

"As painful as it is, this is the most logical thing for us to propose,"  said Chairman and CEO Alex Cruzin in a statement.

British Airways has operated 747s for almost 50 years. With its distinctive upper deck containing a lounge, the "Queen of the Skies" evoked a sense of sophisticated travel. British Airways began flying the 747-400 in 1989. At one point the airline operated 57 of the 400-series planes. Until the arrival of the Airbus A380 in 2007, it was the largest commercial passenger aircraft in the world.

Aside from nostalgia, the 747-400 was less useful for businesses with goods to transport.

When fully loaded with passengers, the jumbo jet has space for six large pallets with 420 cubic feet of volume, plus four small LD3 containers. The cargo payload is 18.6 tons. The remainder of the cargo hold is for passenger baggage.

The Boeing 787-9 in British Airways fleet holds up to 22 tons, with 9 pallet positions and 12 containers. The 777-300 has space for 9 pallets and 12 unit load devices weighing 25.2 tons. Even the 777-200 has more capacity than the 747 at 20 tons, according to aircraft specifications on the IAG Cargo website.

IAG Group is the parent company of British Airways, Iberia, Aer Lingus, and low-cost, regional carriers Level and Vueling.

"The 747, while a solid aircraft for cargo, is really much more of a passenger airplane. The best cargo plane out there, in my opinion, passenger-wise, is the 777-300, which is like 40% bigger than the 747-400 in terms of lower deck capacity," said Cohen, a former managing director of cargo pricing and revenue management at United Airlines. 

In the future, IAG Cargo will operate more flights on the latest generation A350 and 787 aircraft, a company spokesperson said in a statement provided to FreightWaves. 

British Airways, which planned to phase out the 747-400s by 2024, recently took delivery of its first 787-10, which will operate between London and Dallas.

"These new replacement aircraft are a welcome addition as they offer our customers significant increases in cargo capacity per flight," the IAG spokesperson said.

Click here for more FreightWaves stories by Eric Kulisch.

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