Cargolux stuns industry with B747-8F rejection

Luxemburg-based all-cargo carrier, Cargolux stunned Boeing and the air cargo industry in general last month when, only a handful of days before it was due to take delivery of the first of 13 of Boeing’s new B747-8 freighters it has ordered, it announced it was rejecting the first two aircraft. The carrier informed Boeing by letter on 16 September, calling off the handover and three-day celebration scheduled for 19-21 September, citing what it said were “unresolved contractual issues” with Boeing. The decision represented yet another bump in what has not been a smooth road for the 747-8 programme that has faced more than a year of delays due to production and design problems. The new ‘super-sized’ jumbo was initially scheduled for delivery in 2009, with Boeing forced to compensate customers for the production delays. Cargolux said financing of the aircraft, secured through JP Morgan as an Ex-Im Bank guaranteed lender, was put on hold pending resolution of the contractual issues. The carrier added, in the tersely worded statement that: “In the event that the issues cannot be resolved in a timely manner, Cargolux will source alternative capacity to fully meet customer demand and expectations ahead of the traditional high season.” Neither Boeing nor Cargolux has commented on the exact nature of the contractual dispute, but industry players believe it centres around performance guarantees over aircraft weight and fuel burn efficiency. The stunning last minute rejection of the aircraft came only a day after the head of Qatar Airways, chief executive Akbar Al-Baker, took a board seat at Cargolux following the Gulf airline’s decision to take a 35 per cent stake in the maindeck cargo carrier. Al-Baker, who has quickly made a name for himself in the airline industry for being an outspoken protagonist of the Gulf carrier’s increasingly prominent role in the world airline order, is widely believed to be a key factor in this fracas. Some industry analysts say the Cargolux delivery has become embroiled in a wider dispute between Qatar Airways and Boeing over late-delivery penalties for the 787 Dreamliner, which has also faced numerous delays. Atlas also rejects And, in what has been seen as another blow to Boeing, Atlas Air has cancelled the first three of 12 747-8Fs it ordered, citing production delays and concerns about the aircraft’s performance. As such Atlas Air exercised its termination rights for the three early-model freighters, which were scheduled for delivery this year. Atlas Air said it will still acquire three 747-8Fs by the end of 2011, although they will be more recently built models that contain “key modifications”. Boeing will then hand over four more freighters to the cargo carrier next year, with the final two expected for delivery in 2013. To accommodate these new aircraft, Atlas Air will retire five older-generation 747- 200s in 2012. Atlas Air will operate all three aircraft on an ACMI basis for British Airways. The cargo carrier has also entered into an ACMI agreement with Panalpina, flying two 747-8Fs on behalf of the Swiss carrier immediately upon their early 2012 acquisition. William J. Flynn, president and CEO of Atlas Air Worldwide, said: “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.”