Kevin O'Toole and Max Kingsley-Jones/LONDON
LUFTHANSA CARGO'S surprise order for five McDonnell Douglas (MDC) MD-11F freighters, placed half-way through the Farnborough show, could hardly have come at a better time for the tri-jet programme.
With little more than a trickle of sales coming in for the MD-11 passenger aircraft, MDC badly needed to find fresh markets for its tri-jet. It appears that the group may now have found just such a niche.
Although the initial order is for five aircraft only, deliveries of which will begin in mid-1998, significantly it comes from the world's largest international freight carrier. Wilhelm Althen, chairman of Lufthansa's now independent cargo carrier, says that if all goes well, the airline also plans to convert another seven options with delivery dates at around the turn of the century.
More importantly, Althen hints that Lufthansa will be a prime candidate to take the proposed stretched and rewinged MD-XX development, if and when MDC finally launches its MD-11 follow-on. The aircraft could eventually be used to replace the carrier's 11 ageing Boeing 747-200 Freighters, potentially leaving an entirely MD-11 fleet.
Such plans are still a little way off. Althen expects to continue operating two types for perhaps another 10-15 years, but he is clearly enthusiastic about the prospect of a MD-XX with a 13,300km (7,200nm) range and room for another 12 pallet loads.
Lufthansa echoes the concern among other cargo airlines that without such an aircraft to call upon, the carriers will be left with little choice but to take the large and increasingly expensive Boeing 747-400F. Althen points out that the aircraft is too large to fill on any but the world's busiest inter-hub routings.
In fact, according to Althen, talks have taken place with Cargolux, European launch operator for the 747-400F, about using the freighter on some of Lufthansa's main trunk routes to help fill its capacity.
The Boeing offering, carries a price tag, of around $160 million and could come close to costing $200 million within the next five years, if inflation stays on track. If nothing else, the presence of MDC with a viable alternative should help to add a little price competition into the market. MDC now quotes a list price of $110 million for the MD-11F, although judging by Lufthansa's comments about buying "at the right time in the cycle" the airline received a handsome discount. Since writing down the $1.8 billion development costs of the MD-11 programme at the end of 1995, MDC effectively gave itself a free hand to look to attack fresh markets.
MDC believed that the freight carriers formed a significant market from the start of the MD-11 programme, and this was underlined by the fact that FedEx was among the launch customers for the aircraft in 1987. Since the first MD-11 delivery in December 1990, around 20% (33 units) of the 154 aircraft delivered have been equipped for the freight role, according to sales data from the Airclaims CASE database.
Of these, 28 aircraft are the all-cargo versions - the MD-11 freighter and convertible freighter, which have forward maindeck freight doors and full-length cargo floors - while the remaining five are the combi variants, equipped with aft maindeck cargo doors and rear cargo compartments.
Current MD-11 cargo operators include Alitalia (the only customer for the combi), China Eastern, EVA Airways, FedEx, Korean Air, Martinair Holland and World Airways. Twelve of the 27 MD-11s on firm backlog are freighters, and the last two major new customers, Lufthansa and Saudi Arabian Airlines, both chose the freight version. Although the MD-11's success as a freighter cannot be denied, MDC has struggled in recent years to secure new customers for the passenger version, with the last new airline customer being World Airways in October 1992 (VASP, which was a lease customer, signed a contract for two new MD-11s in June 1995).
Several conversions of passenger MD-11s are also being undertaken. FedEx is purchasing American Airlines' 19-strong fleet of the aircraft over the next seven years, and they are being converted to freight configuration by Sabretech in Phoenix. Korean Air's five MD-11s are also being converted to freighters.
Althen says that Lufthansa was genuinely surprised at how cost-effective the MD-11F proved during a lengthy evaluation process. He adds that the competition began just as Lufthansa Cargo set out on the process of a major restructuring, the objective of which was to bring down costs.
Overall, the airline estimates that the MD-11F will cut unit costs by about 10% compared with the costs of the 747-200F, with most of the savings coming from the two-man cockpit and 39% lower fuel consumption.
Althen argues that despite the lower capital cost of a used aircraft or conversion, such options would have left the airline with no prospect of lower operating costs going into the next century.
Source: Flight International
