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Page 18 • AirCArgo AsiA-PACifiC • APRIL -MAY 2017 NCA’s cancellation not the end of the B747-8F. UPS’ order will keep Boeing line busy for years FOR the past four or five years, pundits have tipped the demise of the Boeing 747 production line. Even Boeing got edgy a year or so ago and said the end might be drawing close. But production has continued and the recent decision by Nippon Cargo Airlines (NCA) to cancel its remaining two B747- 8F orders doesn’t necessarily mean the curtain is almost ready to fall. For a start, UPS ordered 14 B747-8 freighters in October, with options for a further 14. That will keep Boeing busy for a while, with a delivery schedule stretching through to 2020. Air- Bridge Cargo Airlines also has the last of its orders to come and has shown no sign of cancelling. Other sales are possible, al- though it is unlikely there will be many, given the changing dynam- ics of the freighter market. The NCA withdrawal had a certain symbolic aura because the carrier was, with Cargolux, one of the first to commit to the B747-8 freighter and was involved in its configuration planning. The announcement, in a late- March statutory filing with the Tokyo and Nagoya stock exchang- es, noted that NCA had “taken the sequential delivery” of B747-8 freighters. The carrier had – and will now continue to have – eight of its 10 ordered hulls. The statement continued: “How- ever, given the need to flexibly respond to fluctuation in the global air cargo market, NCA has reviewed its fleet size and scale. As a result of that review, NCA has come to an agreement with Boeing on the cancellation of two 747-8F freighter aircraft.” Due to this change, it said rather cryptically, “the remainder of NCA’s backlog of orders will be zero”. There has been some specula- tion in the industry as to the type of financial deal hammered out but neither NCA nor Boeing has offered details. NCA is believed to have benefited from a very good price, both because of the numbers involved and its early commitment to the type. NCA merely told the stock ex- changes that “the impact that the change will have on the consoli- dated accounting results is mini- mal”. And Boeing simply said NCA remained an important customer and it would continue to support the carrier’s B747-8 freighter fleet. UPS has shown no change of mind about its order. At the time of signing it indicated it sought the planes to deal with growing long- haul international traffic. The new aircraft will also allow older model 747s to be reas- signed to domestic routes where their fuel burn relative to capacity will have a lesser impact on the bottom line. Nippon Cargo B747-8 freighter, photo Tim Stake/Boeing Are you up-to-date with the latest regulatory changes in trade? Rigby Cooke Lawyers can help you with: > Customs regulations > International trade conventions > Dispute resolution and arbitration > Trade financing options > Commodity and freight contracts > Inquiries by government agencies > Corporate and commercial law > Intellectual property > Workplace relations > Mergers and acquisitions > Planning, building and property > Tax and asset protection Stay informed with Rigby Cooke’s free digital newsletter. www.rigbycooke.com.au/signup To find out more, contact Andrew Hudson: T: +61 3 9321 7851 E: AHudson@rigbycooke.com.au www.rigbycooke.com.au Receive relevant alerts that affect your business – straight to your inbox. PACER Plus concluded – a ray of sunshine in a gloomy trade world What are the wider issues that could stem from the abolition of the 457 visa? Federal Court rolls wheelie bin case back to the AAT Is the Indonesia-Australia Closer Economic Partnership Agreement a cause for optimism? What’s new?