Passengers are having a tougher time finding a seat on theBoeing 747 these days, but that doesn't mean their stuff won't be hitching a ride on the original jumbo jet.
UPS on Thursday announced it was doubling its order for Boeing 747 freighters, giving a burst of life to the jumbo jet that several passenger airlines have retired in favor of more fuel-efficient aircraft.
In mid-2016, Boeing said it was considering ending production of the Boeing 747s, as airlines planned to phase the planes, famous for their humped fuselages, out of their fleets. But UPS' affinity for them is helping keep the planes alive, even if they are a tiny portion of Boeing's order book of more than 5,800 planes.
UPS said it ordered 14 additional 747-8s — worth about $5.65 billion at list prices — bringing its total to 28, counting the jumbos it ordered in 2016. The company also ordered four new Boeing 767s, worth $848.8 million at list prices.
Consumer impatience and a seemingly insatiable appetite for promptly delivered goods are boosting air freight rates and in some cases making space aboard planes scarce. It's a boon for both traditional cargo and package delivery companies as they rush to get packages from Amazon and other retailers, carrying products from salmon to pharmaceuticals to smartphones, to consumers as fast as possible.
Air freight demand rose by 9 percent in 2017 from a year earlier, the fastest clip since 2010, the International Air Transport Association said this week.
"Our intra-U.S. next-day and deferred air shipments are expanding to record levels, and UPS's International segment has produced four consecutive quarters of double-digit export shipment growth," said David Abney, the chairman and CEO of UPS. "To support this strong customer demand, we continue to invest in additional air capacity, providing the critical link our customers need to markets around the world."
The air freight market isn't without risks. Overcapacity in recent years and a preference for rock-bottom costs of sending goods by sea had led to a slump in air freight rates.