Harry Boneham, Associate Analyst at GlobalData, comments, “the announcement that Boeing will cease production of the 747 in 2022 follows news that numerous airlines will be bringing forward the retirement of their 747 fleets due to the effect of the COVID-19 pandemic. British Airways, Qantas, KLM, and Virgin Atlantic have all either retired their fleets, or plan to do so ahead of pre-COVID-19 schedules. This announcement is a signal that Boeing is realigning to conform with the post-COVID-19 market, shedding an increasingly redundant wide-body product, and focusing on narrow-body aircraft such as the 737 and more efficient wide-body offerings such as the 777X.”
The COVID-19 pandemic has had a profound impact on the commercial aerospace industry, with Boeing’s Q2 losses amounting to $2.4 billion. These losses, along with the prospect of a lengthy recovery, have driven Boeing to enact measures such as job cuts, production slowdowns, and now the end of 747 production. According to Boeing, the 747 currently accounts for 0.26% of Boeing’s backlog, and there are currently 15 unfilled orders for 747s outstanding; 12 for UPS, and 3 for Volga-Dnepr UK Ltd. Both companies would operate the aircraft in air freight roles. According to GlobalData’s Global Commercial Fixed-Wing Aircraft Datapack 2020-2030, as of June 2020 the 747 accounts for 20.5% of cargo aircraft, and 1.1% of commercial fixed wing aircraft contracted in 2020.
Boneham continues, “through halting production of the 747, Boeing can focus on producing aircraft more suited to the post-COVID-19 market. According to Boeing, the 737 MAX accounts for 80.68% of unfilled orders. Assuming recertification is achieved, production of the 737 MAX is likely to be the greatest priority for Boeing, although production has been slowed due to COVID-19. Additionally, the 777X accounts for 5.91% of Boeing’s backlog. It is marketed as the world’s largest and most efficient twin-engine jet, making a more suitable wide-body offering for the post-COVID-19 market.”
“Demand for large, long haul aircraft will recover more slowly that short haul aircraft, following the trend observed following previous crises such as the 2008 recession. This is being corroborated by data collated by the International Air Transport Association. With the addition of rising climate consciousness and demand for efficiency, the 747 cannot compete with newer, more efficient designs, and with aircraft more suited to the post-COVID-19 market.”
