Qatar-linked Cargolux stops delivery of Boeing 747-8

Boeing forced to push back first delivery of freighter jet in dispute with Qatar-backed carrier
Qatar-linked Cargolux stops delivery of Boeing 747-8
The dispute will further push back the debut of the Boeing 747-8 freighter jet, which has seen a two-year, $20.4bn delay
By Bloomberg
Sat 17 Sep 2011 01:06 PM

Boeing Co had to postpone next week’s inaugural delivery of the 747-8 freighter, a jet already two years behind schedule, after its initial customer refused to accept the first two planes.

Boeing had to cancel three days’ worth of ceremonies and events beginning Sept 19 because of “unresolved issues” with Cargolux Airlines International SA, said spokesman Jim Proulx. He declined to comment further on the reason for the dispute. The carrier, which is 35 percent owned by Qatar Airways, was scheduled to fly its first load of freight on the new plane out of Seattle that same day.

The clash mars the arrival of the newest and biggest version of the jumbo jet that, with its iconic hump, has been Boeing’s marquis model since its inception in the 1960s. It also comes after numerous struggles at the company, including a three-year setback to its 787 Dreamliner, inroads into its customer base by Airbus SAS and a shift in its new-jet strategy.

“It’s horrendous,” said Ken Herbert, an analyst with Wedbush Securities in San Francisco, in an interview. “Just when you finally thought they were going to turn the corner, this happens.”

The 747-8 freighter won certification last month from the US Federal Aviation Administration to enter commercial service, capping a two-year, $2.04bn delay for Boeing’s biggest plane ever. Luxembourg-based Cargolux was to be the first to receive the jumbo jets, which feature new engines and a stretched upper deck and wings.

 “We continue to work with Cargolux and look forward to delivering its airplanes,” Boeing’s Proulx said yesterday from Everett, Washington, where the planes are built.

Martine Scheuren, a spokeswoman for Cargolux, declined to comment.

Trials continue on the 747-8 Intercontinental passenger model as crews test different systems than on the freighter, including climate control and airflow balancing. The first version of that plane is due to be delivered by the end of this year, and the model is scheduled to begin commercial service in early 2012 with Deutsche Lufthansa AG. (LHA)

The 467-seat, $317.5m 747-8 Intercontinental competes with Airbus’s 525-seat A380, which entered service in 2007, while the $319.3m freighter has no commercial rival. Boeing has 114 orders for the plane.

In July, Boeing abandoned its preference to develop an all- new, narrow body jet and said it would instead offer new engines on the current 737. That mirrored a similar move by Airbus the year before that had helped the European planemaker rack up more than 1,000 orders for its upgraded A320neo in seven months.

The decision came as Airbus broke an exclusive arrangement between Boeing and American Airlines dating back to 1987 by selling A320neo’s to American. Boeing announced the following month that it was replacing its top salesman.

“Clearly, there’s leadership issues all across the board,” Herbert said. “It’s been a very difficult couple of years. There’s so much capital on the sidelines waiting to get into the stock, and they just need to deliver these airplanes, but it’s always ‘next month, next month.’”

For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.