Boeing’s Largest 747 Customer to Take Last Four Iconic Jets

(Bloomberg) -- Boeing Co. won an order from Atlas Air Worldwide Holdings Inc., the world’s largest 747 operator, for the final four humpbacked freighters that will roll out of the planemaker’s Seattle-area factory.

In a second boost for Boeing, DHL Express is ordering eight of the company’s 777 freighters and taking options for another four, expanding a 2018 deal as the coronavirus pandemic spurs demand for air-cargo shipments. The freighter sales are a rare bright spot for wide-body jets as the pandemic curbs demand for long-distance passenger planes.

The deals unveiled Tuesday resolve some of the uncertainty around two of Boeing’s twin-aisle programs as the company grapples with manufacturing defects for a third: the 787 Dreamliner.

As Boeing winds down jumbo output after more than half a century, it is relying on the 777 freighter to tide over production until an upgraded passenger model reaches the market. That model, the 777X, is at least two years behind schedule and could face further delays as the first new model to be certified since two fatal crashes of Boeing’s 737 Max.

Atlas plans to take the four 747-8 freighters from May through October 2022. The deal ends the risk that the Chicago-based manufacturer would be left to market so-called white tail-aircraft -- jets without buyers -- as it builds the final 11 jumbos. Boeing’s backlog had shown that sales of three of the planes were at risk after a trade dispute with Russia’s Volga-Dnepr Group led to litigation.

Boeing fell less than 1% to $205.66 at 1:21 p.m. in New York. The stock reversed earlier gains after the company revealed that for December it didn’t deliver any 787s for a second consecutive month and that the 157 jetliners it delivered last year were eclipsed by the 566 planes handed over by rival Airbus SE.

E-Commerce Rising

Boeing’s 747-8 freighter has a current market value of $180.2 million while the 777 freighter is valued at $166.1 million, according to aircraft appraiser Avitas Inc. That would put the total pocketed by Boeing for the dozen new orders at around $2 billion.

Including the DHL Express deal, Boeing landed 90 firm orders in December to end 2020 with its the best monthly sales tally in more than two years.

Although demand for air-cargo haulers soared as the coronavirus pandemic spread last year, Boeing had already decided to end 747 production after sales sputtered and a key supplier, Triumph Group Inc., exited a pact to build panels for the jet’s fuselage.

Read more: Boeing Quietly Pulls Plug on the 747, Closing Era of Jumbo Jets

Boeing landed a total of 23 orders for wide-body freighters last year, according to the company’s website. Boeing finished the year with 184 gross orders, although its backlog shrank by 1,026 aircraft when taking into account cancellations and sales that remain on its books but are at risk of being scrapped.

Atlas said its order would boost its ability to serve the surging market for e-commerce packages. The cargo carrier, which already operates a fleet of fifty-three 747s, will ensure that the plane nicknamed the “Queen of the Skies” continues to play “a significant role in the global air cargo market for decades to come,” Stan Deal, head of Boeing’s jetliner unit, said in a statement.

Deutsche Post AG’s DHL division also cited the surge in online shopping for its purchase of 777 jets.

“With the order of eight new wide-body freighter aircraft, we underline our conviction that e-commerce is an enduring mega trend,” John Pearson, chief executive officer of DHL Express, said in a statement. “This is why we decided to act early and kick off 2021 with this investment in our future.”

(Updates with 2020 sales totals in sixth paragraph)