A Test Boeing 747-8F Aircraft Parked At Boeing Everett Plant

Atlas Air, the world leader in cargo Aircraft Crew Maintenance Insurance announced Wednesday 21st 2011 it was “exercising right to terminate” 3 brand new Boeing 747-8F out of the 12 ordered since 2006. The 3 aircraft were due to be delivered in October and November 2011. The announcement indicates that because the 3 aircraft were among the first to be issued from the 747-8 assembly line, these ‘early-build’ aircraft did not incorporate the various design improvements installed by Boeing on latter (newer) build aircraft. The implication that performance shortcomings might be more apparent on these three aircraft it seems influenced Atlas air decision. Through Bloomberg.com, Jim Proulx, a Boeing spokesman explained that these 747-8 being “the first airplanes off the line are slightly short of expectations, these early-build models nonetheless will be great airplanes with unparalleled efficiency and low costs,” Elaborating on the aircraft ending being overweight following major re-design work of the wings that have cost the program the two-years delay also adversely impacting Atlas Air. William J. Flynn, President and Chief Executive Officer of Atlas Air Worldwide, hinted the decision from a risk management and operational performance point of view: “As prudent asset managers, terminating the first three aircraft was the right decision for our fleet, our customers and our stockholders. We expect the remaining 747-8Fs in our order to be better-performing aircraft than those we have terminated.”

Atlas Air will only receive 9 Boeing 747-8F instead of 12 ordered

This drastic decision will leave Atlas Air with only 9 of the 12 Boeing 747-8 it intended on operating. Having replaced the 3 aircraft canceled in the assembly, Boeing still intends on delivering 3 brand new 747-8 freighters to Atlas Air in October and November, 4 during 2012 and the final 2 in 2013. For Atlas Air, the priority is to honor its ACMI contract with British Airways with the 3 aircraft that will be delivered by the end of 2011. Another outstanding ACMI will see Switzerland-based global logistics provider Panalpina utilize the first 2 aircraft delivered in the first half of 2012.

Cargolux will operate 11 Boeing 747-8F instead of the 13 ordered.

The cancellation by Atlas Air follows Cargolux decision to “reject” 2 Boeing 747-8 Freighters. The Luxemburg-based cargo airline, launch customer of the type announced September 17th 2011 that its Board of Directors was suspending the 2 aircraft financing process through JP Morgan pending resolution of contractual issues with Boeing. Underlying the dispute seems to be Boeing’s two years delay in delivering the brand new freighters. Industry insiders have speculated that after Qatar Airways recently acquired a 35% stake in Cargolux, frustrations with Boeing’s continuous delays for delivering Qatar Airways 787s would find indirect repercussions. Nevertheless Atlas Air position regarding under performing early-build aircraft, and Jim Proulx candid admissions may be the hard facts in the 747-8F undercarriage.

Cargolux which incrementally received 16 Boeing 747F between 1993 and 2008 now stands to operate 11 Boeing 747-8F instead of the 13 initially planned. Atlas Air still intends during the year 2012 to withdraw from use 4 aging Boeing 747-200F built between 1979 and 1985 along with a Boeing 747-300F built in 1985. For any trip, the performance shortcomings affecting the 3 early build aircraft can easily negate part of the 16% added cargo capacity claimed against a 747-400. Furthermore the substantial and scarce capital investment required for acquiring a new 747-8 versus a second-hand 747-400BCF practically makes the former option much less optimal. Both carriers will thus resort to used 747-400. As for Boeing, the Cargolux decision completely upset plans for the various celebrations programmed between September 19th and 21st, dates at which the 2 aircraft were to be handed over to Luxembourg-based carrier. With official delivery of the first 787 to launch customer All Nippon Airways planned for Monday September 24th 2011, Boeing is looking forward for a celebration after all.

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