10 ms·

>>The Covid-19 pandemic threatens to leave their manufacturers scrounging to find buyers for the last jumbos built. This is imply not true. The last 747s buil

by x43b 6y ago

>>The Covid-19 pandemic threatens to leave their manufacturers scrounging to find buyers for the last jumbos built. This is imply not true. The last 747s built are freighters. Freight demand is at an all time high due to COVID and constraints on supply chians. Even passenger vehicles are being called into freight service (which is far less efficient yet still economical).

jayrice257 6y ago
That doesn't mean people want to buy those planes right now.
nelaboras 6y ago
I'd love to see some numbers on this. As far as I understand they are used for freight because it's better than to let them sit empty (and pilots and ground staff have to be paid too), but it still is not profitable.
- gsnedders 6y ago
  A _large_ proportion of worldwide freight is ordinarily carried in the belly of passenger aircraft. When most airlines stopped flying, the price of air freight _quickly_ rose (as the capacity pretty much fell overnight to just the dedicated freighter aircraft). This meant it became profitable (i.e., above the marginal costs of the flights) to fly passenger aircraft purely for the belly-hold freight. They certainly aren't doing this and making a loss: they're hemorrhaging enough money already that they wouldn't want to add to that, but when the marginal cost is essentially the landing fees minus the parking fees they'd otherwise be paying, plus the additional cost of paying the crew above and beyond any furlough payment, plus the cost of fuel, plus any marginal maintenance cost from the extra cycles.
  - mlyle 6y ago
    Not to mention that when we're talking about freighters, e.g. 747-8F-- they are not limited to belly hold freight. (And have much less cabin weight, fly slower / use less fuel, so the weight they can carry is better than repurposed passenger aircraft).
    - jmkd 6y ago
      Have seen plenty of evidence of freight being shipped in passenger cabins the last few months too. Some in and on the seats and others with seats newly stripped out.
      - 6nf 6y ago
        I don’t have evidence of this to show but friends in the airlines have told me stories of empty passenger planes flying just for freight, sometimes even with small items in the passenger cabin
        seltzered_ 6y ago
        Here's an announcement from KLM back in April (2020-04-30): https://news.klm.com/klm-introduces-cargo-in-cabin-carrying-cargo-on-passenger-seats/ https://news.klm.com/klm-introduces-cargo-in-cabin-carrying-... Here's another piece with flexport: https://techcrunch.com/2020/04/26/ryan-petersen-flexport/ https://techcrunch.com/2020/04/26/ryan-petersen-flexport/ (scroll down and you have an image of packages strapped in a commercial plane)
        robryan 6y ago
        Cathay has been doing this: https://youtu.be/PCJ5ikpIEOs https://youtu.be/PCJ5ikpIEOs If I recall it is only profitable on shorter routes. Certainly into and out of Australia at the moment we are seeing significant surcharges from DHL.
  - perspectivezoom 6y ago
    I just watched a video about this, that basically goes over all your points: "Air Cargo's Coronavirus Problem" by Wendover Productions https://www.youtube.com/watch?v=r2oPk20OHBE https://www.youtube.com/watch?v=r2oPk20OHBE A summary of the video: - Passenger flight belly cargo used to be responsible for 25% of air cargo capacity, so capacity is severely reduced. - PPE emergency logistics has caused a huge spike in demand, since PPE allocations are currently too volatile for anything except for air cargo. Air cargo prices are high. - Government funding for airlines require pilots to remain on salary, so there's no additional marginal cost of labor. - The biggest marginal cost of a flight, the cost of fuel, has understandably also become very cheap. The end result is that even though it's still quite inefficient as compared to dedicated freight planes, the perfect storm of circumstances makes passenger-planes-as-cargo-planes momentarily profitable.
    - mynameishere 6y ago
      I like the shot of airline workers acting like old-fashioned stevedores loading packages one-by-one into the passenger cabin. the cost of fuel, has understandably also become very cheap Apparently, jet fuel was down around 40 cents a gallon. Kerosene, basically the same stuff, was never anywhere near that. Pretty strange.
    - Waterluvian 6y ago
      Tangent: are there a ton of pilots struggling to remain qualified and well practiced given all the flights not flying?
      - 9nGQluzmnq3M 6y ago
        From what I understand, most airlines are rotating the few remaining shifts. This way each pilot gets a couple of flights per month, which is enough to keep their ratings. That said, since many airlines have completely stopped flying some plane types (particulary the A380 superjumbo), those pilots are going to have a problem soon.
        gsnedders 6y ago
  - chrisseaton 6y ago
    > A _large_ proportion of worldwide freight is ordinarily carried in the belly of passenger aircraft. This is absolute nonsense. I don't know how you can claim this with a straight face. Almost all freight goes by sea, rail, and road, not by passenger aircraft.
    - ardy42 6y ago
      > This is absolute nonsense. I don't know how you can claim this with a straight face. Almost all freight goes by sea, rail, and road, not by passenger aircraft. He almost certainly meant air freight, given the context.
    - dialamac 6y ago
      Chill dude. In addition to this being in the context of air freight of which passenger..Not a whole lot of global freight involves rail or road only. Not nonsense.. Passenger planes carried close to half of all air freight. And additionally while air freight only accounts for a small percentage of freight by weight, it carries a tremendous proportion by value.
  - lmm 6y ago
    > This meant it became profitable (i.e., above the marginal costs of the flights) to fly passenger aircraft purely for the belly-hold freight. That's not the usual definition of "profitable". As you say, they're turning a gross profit (if we treat aircraft leasing costs etc. as fixed, which over a short timeframe they are), but it's not enough to cover their fixed costs, so grandparent is correct that they are not (net) profitable.
    - flingo 6y ago
      Is there a single word for "it's more profitable to do this thing, rather than the other thing, or nothing"? I think that's what this counts as. I think this is in the same category of decision as retailers selling old stock at a loss, because that's better than not selling it. A large portion of the modern economy is run by spreadsheets, and crunching the numbers on what the "most-profitable" thing to do often leads to companies doing what seems insane to the average person. P.S.: only the first 2/3rds of that was directed at your comment specifically.
      - lmm 6y ago
        I don't think there's a single word, but there's the concept of "gross profit" like I said.
      - strogonoff 6y ago
        “Loss-conserving?” Or you could say it contains the mounting liabilities.
      - zerocrates 6y ago
        In this air freight context, the relevant short concept would be the "shutdown rule" of economics: you keep operating in the short term as long as your revenue covers your variable costs. If it doesn't, it's cheaper to just not operate at all, but if you're beating the variable costs you're at least minimizing your losses even if you're not covering your fixed costs. In the long run, you can't ignore the fixed costs forever and you eventually just leave the market altogether.
      - occamrazor 6y ago
  - raverbashing 6y ago
    They are putting cargo on the passenger area as well, either removing seats or tying them up over them.
    - youngtaff 6y ago
      BA have stripped the seats from a couple of 777s, so the main deck can carry cargo Will only be lightweight cargo though https://simpleflying.com/british-airways-boeing-777-freight/ https://simpleflying.com/british-airways-boeing-777-freight/
    - youngtaff 6y ago
      Jet2 also have some 737 that can be converted between passenger and cargo In normal times they'd often fly holiday makers in the morning, and freight in the afternoon - takes 45mins to change over Here's one with the cargo door open but the seats in https://www.airliners.net/photo/Flyglobespan-Jet2/Boeing-737-330-QC/1041047 https://www.airliners.net/photo/Flyglobespan-Jet2/Boeing-737... There's a video showing the change over on YT somewhere
- deleted 6y ago
  [deleted]
- ekianjo 6y ago
  You can just look at the freight costs which skyrocketed with COVID.
ksk 6y ago
Are you saying Boeing is getting new orders, when they say they're not?
- gsnedders 6y ago
  They've had one order from UPS this year (though also two cancellations).
crimsonalucard5 6y ago
Ships and Trucks will be handling most of this stuff. Far more economical. Demand will be met by building the most economical transport system, the time advantage offered by planes is not a factor as that is handled by preloading products into distribution centers.
notahacker 6y ago
There's no reason to believe short term constraints on supply chains are much of a factor in demand for new freighters which won't be delivered this year and whose capital costs are amortised over more than a decade. Even if airlines predict the global transport market to remain similar for years, that makes it much more practical and affordable to convert existing passenger aircraft stock [which happens anyway, but we've got more and more modern parked or underutilised airframes right now]

by x43b 6y ago

jayrice257 6y ago

That doesn't mean people want to buy those planes right now.

nelaboras 6y ago

I'd love to see some numbers on this. As far as I understand they are used for freight because it's better than to let them sit empty (and pilots and ground staff have to be paid too), but it still is not profitable.

gsnedders 6y ago
A _large_ proportion of worldwide freight is ordinarily carried in the belly of passenger aircraft. When most airlines stopped flying, the price of air freight _quickly_ rose (as the capacity pretty much fell overnight to just the dedicated freighter aircraft). This meant it became profitable (i.e., above the marginal costs of the flights) to fly passenger aircraft purely for the belly-hold freight. They certainly aren't doing this and making a loss: they're hemorrhaging enough money already that they wouldn't want to add to that, but when the marginal cost is essentially the landing fees minus the parking fees they'd otherwise be paying, plus the additional cost of paying the crew above and beyond any furlough payment, plus the cost of fuel, plus any marginal maintenance cost from the extra cycles.
- mlyle 6y ago
  Not to mention that when we're talking about freighters, e.g. 747-8F-- they are not limited to belly hold freight. (And have much less cabin weight, fly slower / use less fuel, so the weight they can carry is better than repurposed passenger aircraft).
  - jmkd 6y ago
    Have seen plenty of evidence of freight being shipped in passenger cabins the last few months too. Some in and on the seats and others with seats newly stripped out.
    - 6nf 6y ago
      I don’t have evidence of this to show but friends in the airlines have told me stories of empty passenger planes flying just for freight, sometimes even with small items in the passenger cabin
      - seltzered_ 6y ago
        Here's an announcement from KLM back in April (2020-04-30): https://news.klm.com/klm-introduces-cargo-in-cabin-carrying-cargo-on-passenger-seats/ https://news.klm.com/klm-introduces-cargo-in-cabin-carrying-... Here's another piece with flexport: https://techcrunch.com/2020/04/26/ryan-petersen-flexport/ https://techcrunch.com/2020/04/26/ryan-petersen-flexport/ (scroll down and you have an image of packages strapped in a commercial plane)
      - robryan 6y ago
        Cathay has been doing this: https://youtu.be/PCJ5ikpIEOs https://youtu.be/PCJ5ikpIEOs If I recall it is only profitable on shorter routes. Certainly into and out of Australia at the moment we are seeing significant surcharges from DHL.
- perspectivezoom 6y ago
  I just watched a video about this, that basically goes over all your points: "Air Cargo's Coronavirus Problem" by Wendover Productions https://www.youtube.com/watch?v=r2oPk20OHBE https://www.youtube.com/watch?v=r2oPk20OHBE A summary of the video: - Passenger flight belly cargo used to be responsible for 25% of air cargo capacity, so capacity is severely reduced. - PPE emergency logistics has caused a huge spike in demand, since PPE allocations are currently too volatile for anything except for air cargo. Air cargo prices are high. - Government funding for airlines require pilots to remain on salary, so there's no additional marginal cost of labor. - The biggest marginal cost of a flight, the cost of fuel, has understandably also become very cheap. The end result is that even though it's still quite inefficient as compared to dedicated freight planes, the perfect storm of circumstances makes passenger-planes-as-cargo-planes momentarily profitable.
  - mynameishere 6y ago
    I like the shot of airline workers acting like old-fashioned stevedores loading packages one-by-one into the passenger cabin. the cost of fuel, has understandably also become very cheap Apparently, jet fuel was down around 40 cents a gallon. Kerosene, basically the same stuff, was never anywhere near that. Pretty strange.
  - Waterluvian 6y ago
    Tangent: are there a ton of pilots struggling to remain qualified and well practiced given all the flights not flying?
    - 9nGQluzmnq3M 6y ago
      From what I understand, most airlines are rotating the few remaining shifts. This way each pilot gets a couple of flights per month, which is enough to keep their ratings. That said, since many airlines have completely stopped flying some plane types (particulary the A380 superjumbo), those pilots are going to have a problem soon.
      - gsnedders 6y ago
- chrisseaton 6y ago
  > A _large_ proportion of worldwide freight is ordinarily carried in the belly of passenger aircraft. This is absolute nonsense. I don't know how you can claim this with a straight face. Almost all freight goes by sea, rail, and road, not by passenger aircraft.
  - ardy42 6y ago
    > This is absolute nonsense. I don't know how you can claim this with a straight face. Almost all freight goes by sea, rail, and road, not by passenger aircraft. He almost certainly meant air freight, given the context.
  - dialamac 6y ago
    Chill dude. In addition to this being in the context of air freight of which passenger..Not a whole lot of global freight involves rail or road only. Not nonsense.. Passenger planes carried close to half of all air freight. And additionally while air freight only accounts for a small percentage of freight by weight, it carries a tremendous proportion by value.
- lmm 6y ago
  > This meant it became profitable (i.e., above the marginal costs of the flights) to fly passenger aircraft purely for the belly-hold freight. That's not the usual definition of "profitable". As you say, they're turning a gross profit (if we treat aircraft leasing costs etc. as fixed, which over a short timeframe they are), but it's not enough to cover their fixed costs, so grandparent is correct that they are not (net) profitable.
  - flingo 6y ago
    Is there a single word for "it's more profitable to do this thing, rather than the other thing, or nothing"? I think that's what this counts as. I think this is in the same category of decision as retailers selling old stock at a loss, because that's better than not selling it. A large portion of the modern economy is run by spreadsheets, and crunching the numbers on what the "most-profitable" thing to do often leads to companies doing what seems insane to the average person. P.S.: only the first 2/3rds of that was directed at your comment specifically.
    - lmm 6y ago
      I don't think there's a single word, but there's the concept of "gross profit" like I said.
    - strogonoff 6y ago
      “Loss-conserving?” Or you could say it contains the mounting liabilities.
    - zerocrates 6y ago
      In this air freight context, the relevant short concept would be the "shutdown rule" of economics: you keep operating in the short term as long as your revenue covers your variable costs. If it doesn't, it's cheaper to just not operate at all, but if you're beating the variable costs you're at least minimizing your losses even if you're not covering your fixed costs. In the long run, you can't ignore the fixed costs forever and you eventually just leave the market altogether.
    - occamrazor 6y ago
- raverbashing 6y ago
  They are putting cargo on the passenger area as well, either removing seats or tying them up over them.
  - youngtaff 6y ago
    BA have stripped the seats from a couple of 777s, so the main deck can carry cargo Will only be lightweight cargo though https://simpleflying.com/british-airways-boeing-777-freight/ https://simpleflying.com/british-airways-boeing-777-freight/
  - youngtaff 6y ago
    Jet2 also have some 737 that can be converted between passenger and cargo In normal times they'd often fly holiday makers in the morning, and freight in the afternoon - takes 45mins to change over Here's one with the cargo door open but the seats in https://www.airliners.net/photo/Flyglobespan-Jet2/Boeing-737-330-QC/1041047 https://www.airliners.net/photo/Flyglobespan-Jet2/Boeing-737... There's a video showing the change over on YT somewhere
deleted 6y ago
[deleted]
ekianjo 6y ago
You can just look at the freight costs which skyrocketed with COVID.

ksk 6y ago

Are you saying Boeing is getting new orders, when they say they're not?

gsnedders 6y ago
They've had one order from UPS this year (though also two cancellations).

crimsonalucard5 6y ago

Ships and Trucks will be handling most of this stuff. Far more economical. Demand will be met by building the most economical transport system, the time advantage offered by planes is not a factor as that is handled by preloading products into distribution centers.

notahacker 6y ago

There's no reason to believe short term constraints on supply chains are much of a factor in demand for new freighters which won't be delivered this year and whose capital costs are amortised over more than a decade. Even if airlines predict the global transport market to remain similar for years, that makes it much more practical and affordable to convert existing passenger aircraft stock [which happens anyway, but we've got more and more modern parked or underutilised airframes right now]