UPS to acquire 14 Boeing 747-8 Jumbo jets worth $5.3 billion
29 Oct 2016
Boeing's 747 jumbo jet has secured a fresh lease of life with the United Parcel Service (UPS) agreeing to acquire 14 freighters, the biggest order in almost nine years.
The deal for 747-8 aircraft, worth $5.3 billion at list prices comes as UPS undertakes international expansion. The deal is seen as indication of an air-cargo recovery that would renew demand for the iconic plane. Sales had fallen for the four-engine 747 and Airbus Group's A380 superjumbo as passenger carriers switched long-range flights to more fuel-efficient twin-engine jets.
The front-loading cargo planes would serve international routes while some earlier-model 747s would fly on domestic routes, the Atlanta-based courier said on Thursday. The jets, would be delivered over a three-year period starting in 2017. Their induction into the fleet would set off a "cascade" of aircraft-route reassignments that would add significant capacity to the company's busiest lanes.
"UPS is making several strategic capital investments for increased global operating capacity," chief executive officer David Abney said in a statement.
UPS's international export volume had grown by over 40 per cent since 2008, with US domestic volume rising by 20 per cent, according to Myron Gray, president of US operations, The Chicago Tribune reported. The shift would enable UPS to reduce the frequency of flights in overseas markets, he added.
The shipping giant counts over 500 aircraft in its fleet. The new 747-8 freighters have the capacity to carry 34 shipping containers on the main deck and 14 in lower compartments, and around 30,000 packages.
UPS had seen growth in demand over the last few years, which had spurred the decision to buy more planes with some of the biggest growth coming during the busy holiday delivery season, according to commentators.
UPS said it expected to see a 14 per cent increase in deliveries between Black Friday and New Year's Eve, and was planning to deliver a record 700 million packages over the holidays. UPS would also hire seasonal workers for the holiday season.