DAE cancellation of 747-8 freighters questioned

Analysts are questioning media reports which suggest that Dubai Aerospace Enterprise (DAE) is seeking to cancel its order of 10 Boeing jumbo-jet freighters, with a list value of $3.3bn, and instead switching to the smaller 777.

The Bloomberg financial news agency said three people familiar with the matter had claimed DAE would lease the 777s to Emirates Airline.

Regional aerospace analyst Saj Ahmad said: “I 'm a bit cautious about this news since if DAE were going to drop them, why didn't they do it last week when they renegotiated for five777Fs?

“A lot has been made out that this due to the cargo slump. However, why then did they swap for more freighters? It doesn't make any sense if you agree with cargo volumes being erratic. If anything, the 777Fs command more of a price premium since it has no direct rival and is not in a forward loss position like the 747-8F is.

“Personally I believe they will retain these ten 747-8Fs as these are split between Emirates and possibly between Qatar Airways. Even so, the freight falls do not mean that there won't ever be a rebound - because there will be. And with Atlas Air back in the mix for ordering more 747-8F's, then if DAE does cancel/drop/convert these orders, then of course there will be a near term negative impact on the 747-8F, that doesn't mean that the program will suffer forever - like Atlas Air, there will always be other takers for these vacated orders.

“The 747-8F has no direct competitor/rival either, even with the missed fuel burn at present (which will be remedied in due course), this airplane carries more freight and is still more fuel and cost efficient compared to older 747-400F's and 747-400ERF's as well.”