The air cargo business, booming as never before during the global pandemic, is massively dominated by Boeing jets that make up most of the worldwide air freighter fleet. Yet there is a threat to that dominance.

A severe air cargo market dislocation looms ahead that will make obsolete Boeing’s current jet freighter lineup and provide an opening for rival Airbus.

Boeing has been bleeding cash through a cascade of crises — the 737 MAX crashes, the pandemic, the 787 delivery halt — and has lost significant engineering talent in the downturn. Yet if Boeing is to retain its iron grip on the jet freighter market, it must in the next few years develop and launch new cargo aircraft.

The trigger is a new global aviation carbon emissions standard that just six years from now is set to force the shuttering of all three of Boeing’s current Everett-built cargo jet programs — the 747F, 767F and 777F widebody freighters.

That’s an ominous prospect for the Everett site, where Boeing employs about 30,000 people.

With assembly of the 787 Dreamliner passenger jet moved to South Carolina, production of 747 passenger jets ended and just nine more of the current 777 passenger jets on order, today many thousands of workers inside the largest airplane factory in the world build mostly those freighter aircraft.

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The new CO2 emissions standard agreed internationally in 2017 gave airplane manufacturers 10 years after which they can build only jets powered by the newest-generation, most fuel-efficient engines. The 737 MAX and the 787 meet the standard, as will the forthcoming 777X; Boeing’s older planes do not.

For more than two years, Boeing has pushed for a waiver to keep producing at least the 767F a bit longer. That’s not assured.

The new standard is set to stop new deliveries of the current big 777F widebody freighter at the end of 2027, and unless Boeing succeeds in getting that extension, that’s also the end date for the mid-size 767F.

By then the 747 jumbo freighter will already be long gone, with Boeing’s iconic jet program scheduled to finally shut down later this year. With just six of the giant 747-8F models left to deliver, Boeing is set to hand over the last one to cargo carrier Atlas Air in October.

The threat to Boeing’s cargo dominance comes at a time when orders for air cargo jets have exploded, driven by consumers ordering items online that need fast shipping.

To take advantage of the moment, Airbus in November at the Dubai Air Show launched the all carbon-composite A350F, a new freighter version of its newest big widebody passenger jet.

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Steve Rimmer, Issaquah-based CEO of airplane lessor Altavair, who has bought, sold and leased many jet freighters over more than 40 years, said the pending emissions standard will force a complete revamp of the air cargo market.

“You effectively have the entire Boeing freighter product line impacted,” said Rimmer, in an interview. “Boeing has a firm foothold in the existing freight market. There’s no doubt in my mind that the A350F is a huge challenge to that.”

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Crawford Hamilton, head of freighter marketing at Airbus, certainly sees a huge opportunity in the drop-dead date for production of the current lineup of Boeing freighters.

“Everybody’s going to have to do something new,” Hamilton said in an interview. “It puts us on the most level playing field we’ve ever had.”

Boeing has said its initial gambit to retain the market will be replacing the 777F with a freighter version of its forthcoming new large widebody passenger jet, the 777X. But the initial passenger model of that airplane is seriously delayed and the freighter model, known as the 777FX, will enter service even later.

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Executives say if it’s necessary to maintain their market, they may also eventually launch a freighter version of the 787 Dreamliner.

Boeing’s opening counter move — the formal launch of the new 777FX that kicks off development of the aircraft and sets a target date for entry into service some years out — is imminent: When the emir of Qatar visits the White House Monday, he is expected to announce a large launch order for the plane by Qatar Airways.

Bjorn Fehrm, a France-based analyst with aviation consultancy Leeham.net who has done a detailed technical comparison of the proposed new Airbus and Boeing freighters, said in an interview that, after all of Boeing’s missteps that have caused it to lose significant share to Airbus in the passenger jet market, it must get the engineering of the 777FX right.

“I hope and I think that Boeing will focus on the FX and that they will do a proper job of it,” said Fehrm. “Otherwise they are conceding this market to Airbus as well.”

Frederic Horst, managing director consulting at airfreight analysis firm Cargo Facts, agrees.

“The 777FX might be the better aircraft,” said Horst. “But Boeing needs to build it.”

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A surge in demand for air cargo

Over the past three years Boeing has fallen well behind Airbus in orders and deliveries of passenger airliners, yet remains for now the king of the airfreight world.

Of the more than 2,000 commercial freighter aircraft flying today worldwide — planes that have played an outsized role in delivering goods during the pandemic — more than 90% are Boeing jets.

The coronavirus pandemic has slashed the number of international flights by passenger planes, which typically carried large amounts of freight in their cargo holds. And global supply chain problems have also drastically slowed marine shipping, the main channel for international trade of goods.

Meanwhile, express home delivery of packages within days of ordering has grown rapidly in the pandemic. Amazon is flying a large fleet of widebody cargo planes — used Boeing 767 passenger planes converted to freighters — and as the supply of used 767 passenger jets tightens it is now looking for used Airbus A330s to convert.

Prices and profits for airfreight carriers have risen so much that Fehrm said “today you can fly an (Airbus) A330 passenger plane half empty and still make money on the freight carried below the passenger floor.”

Reflecting the urgent demand for more air freighter jets, both new-build models and converted passenger planes, the International Air Transport Association (IATA) released data this month showing the global amount of cargo carried by air last year was 7% higher than in pre-pandemic 2019.

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IATA Director General Willie Walsh said that should continue this year. “Economic conditions do point toward a strong 2022,” he said.

With deliveries of Boeing’s large passenger jet stalled, deliveries of air cargo jets have provided it much-needed cash.

During the past three decades, Boeing has on average each year delivered 23 widebody freighters out of the Everett factory. Last year, it delivered 41.

In addition, Boeing booked 81 net orders for new freighters in 2021, the best year on record.

Airbus makes its move: the A350F

Could the A350F finally give Airbus a foothold in the air freighter market?

Leading aircraft lessor Air Lease Corp (ALC) and giant French shipping and logistics group CMA CGM launched the A350F with 11 firm orders. Subsequently, Singapore Airlines and Air France-KLM announced commitments for 11 more.

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ALC chairman Steven Udvar-Hazy said in Dubai that Boeing had pitched him the 777FX before he chose the A350F instead. One factor was Airbus providing a firm A350F entry-into-service date of 2025 while the Boeing jet will come much later — “probably around 2028,” Udvar-Hazy told trade magazine Flight Global.

Boeing CEO Dave Calhoun has said the 777FX cargo version will be “an incredible freighter,” large enough to essentially replace both the 777F and the 747-8F. But certification of the passenger version of the 777X is delayed until late 2023 and won’t be delivered until 2024.

Given that the 777FX is likely to debut at least a couple of years later than the A350F, for the interim the Airbus jet will have to compete only with the current Boeing 777F model.

Though the 777F has long been the most economical freighter on the market, the new A350F is longer and beats it on payload. Made from carbon composites, it’s also lighter and more fuel efficient.

The new Airbus jet will carry a total weight of 120 tons versus about 117 tons on the Boeing jet and a volume of 24,500 cubic feet of cargo versus about 23,000 cubic feet for the 777F.

Hamilton of Airbus said that extra payload is aimed at carriers who need to replace aging last-generation 747 jumbo jet freighters, which are not as large as the current 747-8F.

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“We want to create a real replacement for the 747,” he said.

Rimmer said because the A350 passenger jet has been in service for seven years and airlines know it is highly efficient, the cargo version promises to be particularly appealing to large international carriers that already fly A350 passenger planes — such a Singapore, Cathay Pacific and Lufthansa.

“If Airbus produces what they’ve shown people on paper, I would say it’s a compelling aeroplane,” said Rimmer.

Boeing response: the 777FX

But while the A350F is bigger than the current 777F, Boeing should have the largest freighter when it finally produces the 777FX.

Fehrm, the France-based analyst, said that although the A350F will be “a good size with very attractive economics,” nevertheless he expects Boeing to design the 777FX to be more capable.

“If you want a larger freighter, and if you really want to have a replacement for the 747 freighter or to go as large as possible because you have a market where you have a very high volume … then I think the 777FX is going to be equally attractive,” said Ferhm.

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He doesn’t see the 777FX coming later to market than the A350F as a huge issue because airfreight carriers that have the 777F in their fleets, such as FedEx, will almost certainly buy more of them until the new model comes along.

On the other hand, airlines that don’t have a current freighter fleet, or who fly the A350 passenger plane, will consider the lighter A350F for its superior fuel efficiency and operating economics over the 777F.

“There’s a market for both,” said Fehrm.

Brian Hermesmeyer, freighter customer leader at Boeing Commercial Airplanes, sees Boeing’s existing fleet dominance as his sales team’s key advantage and a barrier for Airbus.

He said a cargo operator currently flying 777Fs won’t want to mix A350Fs into the fleet because the Airbus plane has a different fuselage cross-section and contour, which means that loads sized to fit precisely inside the 777F won’t fit in the A350F.

At big cargo hubs, operators may want to shift parts of loads from one plane to another.

“Making sure that the airplane you’re flying integrates well with any existing freighter operations you have in your fleet really has a lot to do with keeping as close to a standard cross-section as you can,” he said. Otherwise, “the level of disruption in having to figure out how to stack the cargo is not small.”

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Horst of Cargo Facts agreed that could be a stumbling block for Airbus at big airlines in the Middle East where aircraft-to-aircraft transfers are more common.

Hamilton of Airbus, in contrast, said he’s hearing from airlines that they are ready to cope with mixing their fleets by keeping the Airbus and Boeing jets operationally separated.

Altavair’s Rimmer said he expects the Airbus cargo jet to find takers among airlines that fly both passenger and freighter planes, such as Singapore and Korean Airlines, while all-cargo operators like FedEx, UPS and DHL are more likely to stick with Boeing.

And Boeing’s first 777FX launch order from Qatar Airways is virtually guaranteed. After bitter public recriminations over paint defects on the A350, Qatar and Airbus have so fallen out that this month they each initiated court proceedings against the other.

With the future contenders for large freighter orders now clear — A350F vs 777FX — Boeing has a separate decision to make about what can replace the mid-size 767F.

To buy time, Boeing is currently seeking a U.S. government waiver from the International Civil Aviation Organization (ICAO) emissions standard that would allow it to continue to make the 767F beyond 2027.

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The ICAO agreement allows for exemptions on the grounds of either excessive economic impact on a manufacturer or by arguing that the environmental impact of not replacing even older jets would be worse.

Since the 767F for the past decade has been delivered exclusively to just two customers, FedEx and UPS, both American companies, the U.S. government might grant such a waiver. Boeing could argue that delivering a new 767F to FedEx to replace one of its ancient MD-10 tri-jets would substantially reduce carbon emissions.

CEO Dave Calhoun said in July that the government should accommodate such a request “in some way, shape or form.”

However, an exemption for the 777F is highly unlikely. Because it’s a long-haul international freighter sold globally, it could not be solely a U.S. decision; other countries would have to agree.

Longer term, even with a 767F exemption for a couple of years, Boeing will need to replace that jet. Hermesmeyer said at that point a freighter version of the Dreamliner, a 787F, “would be the natural place for us to go.”

Though Boeing essentially defined the technology of modern airfreight, Horst said it now faces a challenge in that market for the first time in years.

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With Airbus moving to steal its market, with the 777F and the 767F lines set to shutter, with money tight and with launch plans late, Boeing has to develop the 777FX and the 787F as replacements and do it while avoiding major missteps like the ones that severely set back the MAX and 787 programs.

“Otherwise, they’re not going to be in the freighter business anymore,” said Horst.

NOTE: In an earlier version of this story, the graphic misstated the ranges of the Airbus A350F and the Boeing 777F and 747-8F. At maximum payload, those ranges are, respectively, 5,400 miles, 5,700 miles and 4,900 miles.