Airbus challenges Boeing cargo dominance with A350 freighter

Europe's Airbus took aim at one of Boeing's most profitable strongholds on Thursday with plans for a freighter version of its A350 passenger jet, gambling that a pandemic boom in Internet shopping will outlast the global health crisis.

Boeing has for years dominated the market for air freighters even as its European rival grabbed its crown as the world's largest maker of passenger jets.

Airbus said its board had backed an A350 freighter to enter service in 2025 but did not immediately announce customers.

"We believe we have a very promising aircraft," Chief Executive Guillaume Faury said after unveiling better-than- expected half-year results.

Plans to challenge Boeing's control of the freight market, maintained for decades through its 767, 777 and 747 cargo jets, were first reported by Reuters in March.

The move is seen certain to trigger a response after Boeing Chief Executive Dave Calhoun on Wednesday listed developments including "I hope in the relatively near term" a freighter version of the 777X.

The 777X is set to be the world's largest twin-engined passenger jet but its development has been delayed by tightening safety certification standards and weak passenger demand.

The head of Qatar Airways told Reuters last month Boeing was already showing designs for a 777X freighter.

Airbus has for months been informally canvassing support for an A350 freighter in addition to the smaller A330 freighter, whose sales failed to keep pace with the 767 cargo workhorse.

Freighter premium

Airbus hopes the arrival of the world's first lightweight carbon-fibre freighter will tip the market in its favour as tougher emission standards, which are expected to limit deliveries of existing Boeing freighters, enter force in 2028.

Boeing is expected to argue that its larger 777X freighter will be more integrated with existing infrastructure.

Thursday's announcement formally begins a race to sign up influential buyers ranging from express firms like FedEx and UPS to freight-conscious Asian airlines or dedicated cargo carriers led by Luxembourg's Cargolux.

"We are closer every day, but we are not at the point where we can announce commercial transactions," Faury said. At stake is Boeing's dominance of a lucrative but volatile corner of the jet market in which freighters can fetch higher prices than passenger equivalents, according to market sources.

New freighters could support depressed output of wide-bodied jets pending a pick-up in international passenger travel.

About half of global cargo by value travels by air, and in turn half of that usually goes in the belly of passenger planes.

During the pandemic, many airlines have been forced to park unused passenger jets, driving up demand for cargo space on dedicated freighters at a time when e-commerce has been a lifeline for many during COVID lockdowns.

Economists warn the trends could start to unravel as the pandemic eases, but Faury said he was not worried about missing a wave of anticipated cargo replacements later this decade.

Boeing last year predicted demand for 2,430 freighters over 20 years, including 930 purpose-built cargo planes and 1,500 converted from passenger airplanes.

(Source: Reuters)

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