Mid-size crisis: has Airbus got it right?

ASK A B747-8 operator about the ‘plane, and you will likely hear an enthusiastic accolade to the aircraft’s operating economics.
Outfits that have not embraced the new behemoth are more likely to warn that present market conditions make it challenging to load 140 tonnes both ways on most routes, undermining the case for the -8 at this point.
It appears that the pessimists are in the majority these days. In mid-October, Boeing announced that it was slowing down the production rate of the B747-8, owing to slow demand. Only 107 models have been sold, and only five orders contributed to this tally in 2013. Above all, the passenger version has attracted scant interest.
Demand for B747-8 freighters is hardly rampant these days, given the reservations about freighters in airline boardrooms in the current climate.
Historically, Boeing never had much expectation for the very large aircraft segment – hence its decision to stretch the B747 rather than develop a new model as rival Airbus did with the A380 – but the B747-8 is not selling well, particularly when compared to the B777, which has been going strong both in passenger and all-cargo configurations.
Still, the question that is staring the planemaker’s management in the face is if this is merely a reflection of a cyclical market downturn, or of a structural shift that is undermining the case for large widebody freighters.
Somewhat controversially, Airbus is taking the latter view. When it tabled its latest long-range cargo forecast, the European planemaker accompanied it with an assessment of the airfreight market that shows a significant change in the underlying trends that will have a profound impact on freighter demand.
“We foresee a shift of cargo dynamics, mainly driven by the emerging economies,” says Andreas Hermann, Airbus’ vice-president and head of freighters. He points to the rise of emerging economies, which are growing faster than the established economies in North America and Europe.
Airbus forecasts that over the next 20 years, trade in emerging countries will almost triple. With their rising stature, and increasing trade flows between them, they are going to precipitate a change in global flow patterns. Intra-regional flows are set to rise markedly, which will require new and diverse networks based on a trend towards regionalisation, he argues.
The upshot of this is that a one-(large)-size-fits-all approach no longer applies to freighter deployment (if it ever did). Airbus analysts see demand for large widebody freighters diminishing, whereas mid-sized cargo ‘planes will thrive. At the same time, the traditional long-haul sectors will experience a rise in bellyhold capacity that should further undermine the case for large freighters, Hermann says.
Read Ian Putzger’s full piece in the next edition of Freighters World 16 December 2013

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