The 2018 Farnborough International Airshow started with a drumbeat from a cargo viewpoint: Russian Volga-Dnepr Group and its UK subsidiary CargoLogicHolding announced today (17 July) the signing of a package agreement. It includes a letter of intent for 29 Boeing 777 freighters and a fix order for five 747-8 freighters. Total value of the package: US$11.9 billion according to current list price.
By putting his signature on the dotted line, Volga-Dnepr Group president Alexey Isaikyn sends an extremely strong signal to the cargo world, confirming the unprecedented attempt of his transport
empire to become world leader in core segments of the air freight business. This aim is, albeit modestly, confirmed in the Group’s press release: The agreements “will further optimize the cargo
transportation leaders' airplane fleet and global operations,” reads the statement.
The Farnborough package solution further includes a commitment for both the V-D Group of Airlines and U.S. manufacturer Boeing to explore other freighter solutions, such as new production 767 freighters or converted cargo jets such as the 737-800 BCF (Boeing Converted Freighter).
The deal could be a paradigm shift in the Russian company’s mid-term fleet policy away from their aging Antonov 124s towards a mixed fleet of Boeing 747-8Fs and their slightly smaller variants B777F and B767F. A major reason for this seems to be, say sources close to the case, that Volga-Dnepr’s AN-124 freighters are suffering increasingly under component shortage caused by an embargo imposed by AN-124 license holder Antonov, which is fully owned by the Ukrainian state.
(top row left to right) David Joyce CEO GE Aviation / Dennis Muilenburg, chaiman of the board, president and CEO Boeing Company / Stan Deal, CEO Boeing Global Services. Seated: Kevin McAllister, CEO of Boeing Commercial Airplanes / Alexey Isaykin, president V-D Group.
Volga-Dnepr operated AN-124s seem to be a phase-out model
This reorientation of V-D Group’s fleet policy is also indicated in their release: “While the Group and its partners have largely built its business on very large four-engine freighters, it now plans to expand its future fleet options with a commitment for the twin-engine 777 freighters.”
Should the letter of intent be converted into a firm order, which is highly probable as past agreements between V-D and Boeing indicate, the 29 B777Fs will become part of CargoLogicHolding’s fleet, while the five additional B747-8Fs will be added to AirBridgeCargo’s assets.
“Very significant day”
Part of the deal is a service package, attesting that Boeing will provide ABC with a Crew Pairing solution to support the planning and operation of the airline’s 300 crew members. “The program creates optimized work duties, improving crew efficiency and improving airline productivity,” reads the press release.
During the Farnborough made announcement, V-D Group chief Isaikyn spoke of “a very significant day in our company’s history.” He even went further, revealing plans of closer ties between his enterprise and the U.S. planemaker: “We will work with Boeing to develop new freighter solutions that will help us continue to serve the unique and fast-changing requirements of our global customers," Mr Isaikyn stated.