Etihad Airways orders 7 large Airbus freighters

Etihad Airways, which posted record first-half results, on Wednesday finalized an expression of interest from Airbus to purchase seven future A350 freighter models to expand its cargo operations.

Earlier this year, the Abu Dhabi-based airline placed a tentative order for the A350 freighters, an offshoot of the popular A350 passenger jet that is under final development as a freighter aircraft.

Etihad is one of six customers for the brand new freighter. Airbus now has 31 firm orders from Air France, Air Lease Corp., CMA CGM Air Cargo, Singapore Airlines and Silkway West Airlines. Airbus (DXE: AIR) is launching a concerted challenge to Boeing’s dominance in the cargo market for the first time.

Boeing’s answer to the A350F is the next-generation 777-X, now designated the 777-8 in the freighter variant. Boeing (NYSE: BA) has more than 50 orders for the 777-8, including 34 from Qatar Airways. Lufthansa Cargo and All Nippon Airways are also taking a few 777-8s, with Ethiopian Airlines still on the fence. Cargolux announces that it will modernize its 747 fleet with 777-8s but has not yet made any real commitments.

Etihad already operates five A350-1000s, the largest passenger version of the model and the one on which the cargo plane is based. Fleet commonality is a major airline consideration as it simplifies pilot training and maintenance.

The A350 is a long-haul freighter capable of carrying a payload of 120 tonnes. More than 70% of the A350F’s airframe is made of advanced materials, resulting in a lighter takeoff weight of 33 tonnes and fuel consumption and emissions at least 20% lower than those of Boeing’s former 777 freighter, according to Airbus.

Airbus’ recent 20-year freight forecast indicates an annual growth of 3.2% in freight demand, driven by the express sector, and the need for aircraft replacement will require 2,440 deliveries of freighter aircraft, of which 560 jumbo jets. Nearly 900 of these will come from new production and the rest from passenger conversion.

Freight exceeds one third of total turnover

Etihad last week reported record first-half operating profit of $296 million and freight revenue of $802 million, a 6% gain from the same period in 2021.

Cargo revenues remained strong despite increased passenger volumes limiting cargo space in the lower deck, resulting in a 19% reduction in cargo carried (325,203 tonnes). Cargo accounted for a 35% share of total revenue, a significant portion for most hybrid airlines. Airlines have increased revenue this year despite weaker demand as a limited supply of air travel supports fares.

Etihad also operates five Boeing 777 freighters.

The company said cargo on-time performance was 83% despite airport ground handling delays across its network.

Etihad said it has seen its business expand for pharmaceutical and live animal shipments through continued investment in infrastructure and new products to ensure safety and product standards are met.

It recently started using improved thermal blankets which it claims significantly increase temperature protection for pharmaceutical cargo during aircraft loading and unloading.

Energy saving cooling units

Etihad Cargo also reported an 81% penetration rate for electronic air waybills as it moves away from a paper-based environment for doing business. Features added to its new online booking portal resulted in 57% more bookings made through the portal, and the carrier launched a Mandarin language version of its website and booking portal to better serve customers in China, which represents more than 20% of its operations.

On the environmental front, Etihad Cargo agreed last month to work with Luxembourg-based company B Medical Systems to develop a more durable temperature-controlled container, designed specifically for the aviation industry, which uses passive cooling technology. Many refrigerated containers currently have multimodal applications.

B Medical Systems manufactures medical refrigeration devices.

The units will be designed to maintain temperatures of minus 112 to 77 F for up to five days without requiring an external power source. Reducing the need for active power to maintain the conditions of temperature-sensitive pharmaceutical shipments will reduce carbon emissions. B Medical Systems’ current portfolio includes products that use solar energy as well as green refrigerants.

Etihad Cargo has also replaced aluminum unit load devices with lightweight containers, which can save over 440 pounds in weight, reducing fuel consumption and CO2 emissions.

Etihad made its operating profit despite an almost 60% increase in fuel costs. Operating costs increased by only 26% despite a 46% increase in deployed passenger capacity.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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