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Tag Archives: Boeing 747-800F

Silk Way Airlines takes delivery of its first two Boeing 747-800F freighters

Boeing (Chicago and Seattle) and Silk Way Airlines (Baku, Azerbaijan) today (August 28) celebrated the delivery of the airline’s two 747-83QF freighters. The first airplane (4K-SW881, msn 44444) was delivered last week and the second airplane (4K-SW882, msn 44937) was delivered today (August 28).

To date, Boeing has delivered 49 747-8 Freighters.

Copyright Photo: Royal S. King/AirlinersGallery.com. Boeing 747-83QF VQ-BVC (4K-SW882) lands after a test flight at Paine Field near Everett, WA.

Silk Way Airlines: AG Slide Show

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Atlas Air Worldwide Holdings reports 2Q adjusted net income of $15.9 million

Atlas Air Worldwide Holdings (Atlas Air and Polar Air Cargo) (New York) reported adjusted net income of $15.9 million for the second quarter.

The company issued this statement:

Atlas Air Worldwide Holdings, Inc., a leading global provider of outsourced aircraft and aviation operating services, announced adjusted net income attributable to common stockholders of $15.9 million, or $0.63 per diluted share, for the three months ended June 30, 2014, compared with $20.4 million, or $0.79 per diluted share, for the three months ended June 30, 2013.

On a reported basis, net income attributable to common stockholders in the second quarter of 2014 totaled $29.6 million, or $1.17 per diluted share, compared with $20.1 million, or $0.78 per diluted share, in the year-ago quarter.

“We are off to a good start in 2014. Airfreight demand is improving, and we are encouraged about our full-year outlook,” said William J. Flynn, President and Chief Executive Officer. “As we continue to gather additional insight into second-half yields, demand and military requirements, we are maintaining our full-year earnings framework.”

Mr. Flynn added: “Atlas is an entrepreneurial company. Our second-quarter results illustrate the positive contributions being generated by the investments we’ve made and the initiatives we’ve undertaken. In the face of an uncertain airfreight market and an anticipated decline in military cargo demand, we have diversified our business mix and are driving business resilience.

“Results within our ACMI segment are benefiting from modern 747-8 freighters as well as an increase in flying for our CMI customers. In Dry Leasing, the investments we’ve made since early 2013 in attractive 777 freighters on long-term leases with strong customers are driving a significant increase in contribution from highly predictable revenue and earnings streams.

“In addition, the expansion of our 767 platform and our growth into military and commercial passenger charter operations are providing added strength, complementing the improvement in airfreight demand.

“Led by the strength of our brand, our global market leadership in outsourced aircraft assets and services, and our ability to work closely with our customers as they enhance their route networks and grow their businesses, we are well-positioned to take advantage of market opportunities and improvement – and to continue our focus on longer-term business growth.”

Adjusted earnings in the second quarter of 2014 exclude an income tax benefit of $24.0 million, or $0.95 per diluted share, due to beneficial tax planning related to the tax treatment of extraterritorial income. This was partly offset by a noncash loss of $9.4 million after tax, or $0.37 per diluted share, resulting from the trade-in of used spare engines for new engines under the company’s engine-acquisition program, as well as additional charges totaling $1.0 million after tax, or $0.04 per diluted share, which were primarily related to the company’s U.K. affiliate, Global Supply Systems Limited.

Adjusted earnings in the second quarter of 2013 exclude an after-tax loss of $0.6 million, or $0.02 per diluted share, on the early extinguishment of debt, partly offset by an after-tax gain of $0.3 million, or $0.01 per diluted share, on the disposal of aircraft.

Second-Quarter Results

Profitability in our ACMI business during the second quarter reflected an increase in 747-8F revenue and an increase in CMI flying, offset by higher maintenance expense for aircraft operating in this segment.

ACMI revenues benefited from an increase in our average rate per block hour driven by our 747-8Fs, but were impacted by a decline in block-hour volumes related to the return of three 8Fs from British Airways in April and early May. This decline was partially offset by the placement of two of the 8Fs with DHL Express in May, the start-up of ACMI 8F flying for BST Logistics in February 2014 and Etihad in May 2013, as well as the start-up of ACMI 747-400 flying for Astral Aviation in September 2013. Block-hour volumes during the second quarter also reflected an increase in CMI Dreamlifter flying for Boeing and the initiation of CMI 767-200 passenger aircraft service for MLW Air during the third quarter of 2013.

In Dry Leasing, revenue and profitability grew following the addition of three 777F aircraft in January 2014 and two in July 2013, which raised our 777F fleet count to six. Each of these aircraft are leased to customers on a long-term basis.

In AMC Charter, results benefited from an increase in the volume of passenger flying on higher-yielding 747-400 aircraft, partially offset by a decrease in demand for cargo flying. Segment results in Commercial Charter reflected a decrease in market rates and increases in maintenance and crewmember travel expense, partially offset by an increase in block-hour volumes.

Reported earnings for the period reflected an effective income tax rate benefit of 461.0%, driven by tax-planning efforts regarding a federal income tax benefit related to the treatment of extraterritorial income from the offshore leasing of certain of our aircraft.

Half-Year Results

For the six months ended June 30, 2014, adjusted net income attributable to common stockholders totaled $27.3 million, or $1.08 per diluted share, compared with $26.3 million, or $1.01 per diluted share, for the six months ended June 30, 2013.

On a reported basis, first-half 2014 net income attributable to common stockholders totaled $37.5 million, or $1.49 per diluted share, compared with $40.1 million, or $1.54 per diluted share, in the first half of 2013.

Cash and Short-Term Investments

At June 30, 2014, our cash, cash equivalents, short-term investments and restricted cash totaled $299.2 million, compared with $339.2 million at December 31, 2013.

The change in position reflected cash provided by operating and financing activities offset by cash used for investing activities.

Net cash used for investing activities during the first half of 2014 primarily related to the purchase of three 777F aircraft for our Dry Leasing business.

Net cash provided by financing activities primarily reflected proceeds from the issuance of debt in connection with the acquisitions of these aircraft. Those proceeds were partially offset by payments on debt obligations and debt issuance costs.

Outlook

We are encouraged by our performance in the first half of 2014 and the positive direction of market trends so far this year.

Airfreight volumes continue to improve, and recent forecasts suggest that airfreight demand may grow by several percentage points in 2014 – the first real growth after three essentially flat years. Airfreight yields continue to lag behind, however, and there is still limited visibility into peak-season yields, demand and second-half military requirements. As a result, we are maintaining our earnings outlook for the full year.

On a sequential basis, per-share earnings in the third quarter of this year should improve over our adjusted second-quarter results by an increment similar to the increase between our first- and second-quarter adjusted earnings.

For the full year, we expect total block hours to be comparable to 2013, with more than 70% in ACMI, approximately 10% in AMC Charter, and the balance in Commercial Charter. Our Dry Leasing segment should show dramatic growth compared with 2013. While our share of military flying, mainly in passenger service, has increased due to a reduction in the number of carriers serving the market and our ability to capitalize on additional flying opportunities, we continue to expect an overall decline in military demand, primarily in cargo, compared with 2013.

We also expect aircraft maintenance expense to total approximately $180 million in 2014, with depreciation of approximately $120 to $125 million. Core capital expenditures this year are expected to total approximately $45 to $50 million, mainly for spare parts for our expanded fleet.

We remain confident in the resilience of our business model, as well as our ability to adapt to the market and to leverage the scale and efficiencies in our operations. The business initiatives we have undertaken and the investments we have made have enabled the company to deliver meaningful earnings in any environment.

Should 2014 be the inflection point when growth returns to commercial airfreight and yields improve, our business initiatives and the investments we have made have positioned Atlas to be one of the prime beneficiaries.

Atlas Air Worldwide is the parent company of Atlas Air, Inc. (Atlas) and Titan Aviation Leasing (Titan), and is the majority shareholder of Polar Air Cargo Worldwide, Inc. (Polar). Through Atlas and Polar, Atlas Air Worldwide operates the world’s largest fleet of Boeing 747 freighter aircraft.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 747-87UF N852GT (msn 37571) of Atlas Air taxies at Anchorage, AK.

Atlas Air: AG Slide Show

Polar Air Cargo: AG Slide Show

AirBridgeCargo Airlines is coming to Munich on May 9

AirBridgeCargo Airlines-ABC (Moscow-Sheremetyevo), the largest Russian scheduled cargo airline and part of Volga Dnepr Group, is further expanding its services in Central Europe by introducing direct services to/from Munich with a Boeing 747 freighter on May 9.

The new Munich flight to Moscow’s Sheremetyevo Airport will be in addition to the existing 4 weekly Boeing 737 flights operated by Atran Cargo Airlines, also part of Volga Dnepr Group. ABC Boeing 747 all-cargo flight between the Bavarian capital and ABC hub in Moscow (Sheremetyevo) will be on Friday midday, providing ideal end of the week departure time for European customers.

Germany has always been one of the most important markets contributing to ABC’s growth over the last decade. Earlier this year ABC launched scheduled Boeing 747 services to and from Leipzig, extending the Group’s strong association with the airport, where it has invested in a modern aircraft maintenance and repair facility to serve a variety of aircraft types (Boeing 747-200/300/400/8 (CF-50/80, PW4000), Boeing 737CL).

AirBridgeCargo’s scheduled network covers major markets in Asia (China, Japan and Korea), Europe (the Netherlands, France, Germany, Italy, Spain and Sweden) and North America (Chicago, Dallas).

The airline’s fleet is one of the youngest in the industry and includes 12 Boeing 747s: four Boeing 747-400ERFs, three Boeing 747-400Fs and five brand new Boeing 747-8Fs. The average fleet age is about 4 years.

Copyright Photo: Arnd Wolf/AirlinersGallery.com. Boeing 747-8HVF VQ-BLR (msn 37668) taxies at Amsterdam’s Schiphol Airport (AMS).

AirBridgeCargo Aircraft Slide Show: CLICK HERE

Routes to Europe:

AirBridgeCargo 5.2014 European Route Map

Cargolux improves with a net profit of $8.4 million in 2013

Cargolux Airlines International (Luxembourg) at its annual general meeting, the shareholders of Cargolux Airlines International S.A. approved the audited financial statements for the financial year ended on December 31, 2013.

2013 Highlights

Cargolux earned a full year net profit of US$ 8.4 million compared to US$ 35.1 million net loss in 2012;

Total revenues rose 14.4% to US$ 1,988.5 million from US$ 1,738.9 million in 2012.
Key Performance Indicators:

Tons sold increased 16.7% to 753,848 from 645,759 in 2012;

Average load factor softened 0.9 percentage points to 67.7%;

FTK strengthened to 5.7 million compared to 4.8 million in 2012;

Daily aircraft utilization stood at 14:57 block hours versus 15:07 in 2012.

In spite of a moderate recovery in the last quarter, the airfreight industry continued to operate in a difficult environment for the most part of 2013. Capacity growth still outstripped demand, which resulted in an industry-wide decline in yields and load factors. Despite difficult trading conditions, Cargolux grew its activities and increased volumes in a bid to maximize contribution to fixed costs. This was achieved quite successfully, as the company recorded a tonnage growth of 16.7% over 2012 to 753,848 tons – exceeding the 2013 budget by 13.5%. Total revenues grew by 14.4% to $1,988.5 million (US) while tons-kilometers flown increased from 4.8 million in 2012 to 5.7 million in 2013.

Cargolux operated 95,022 block hours, 13,364 hours more than planned for 2013. The high amount of operational activity contributed towards achieving a net consolidated gain of $8.4 million (US), a noteworthy improvement over the originally budgeted loss for 2013 of $27.1 million (US).

Cargolux expanded its fleet with three new Boeing 747-8Fs and retained, on a power-by-the-hour basis, a Boeing 747-400F that was initially planned to exit the fleet during 2013. It also added a Boeing 747-400ERF on the same basis, which brought the fleet to 20 aircraft at the end of the year. In contrast, the budget for 2013 foresaw a fleet of 16 aircraft only.

With a bigger fleet and more operational activity than planned, Cargolux recorded an average daily aircraft utilization of 14:57 hours. The company’s market share reached 3.5% and it ranked at number 8 among the world’s dedicated freighter and combination carriers in terms of FTKs.

“We don’t expect market conditions to improve significantly in 2014,” said Cargolux President and CEO Dirk Reich. “Our priority is to grow and expand our global network with the continued support and valuable contribution of our hard working employees while focusing on efficiency and performance improvements. I am also confident in our ability to reap the first tangible rewards from the cooperation with our new shareholder HNCA”, Reich added.

Copyright Photo: Karl Cornil/AirlinersGallery.com. Boeing 747-8R7F LX-VCG (msn 35812) taxies past the camera at Amsterdam.

Cargolux Aircraft Slide Show: CLICK HERE

Cargolux orders an additional Boeing 747-8 Freighter

Cargolux Airlines International (Luxembourg) and Boeing (Chicago and Seattle) have announced an order for an additional 747-8 Freighter. The order, valued at $357.5 million at list prices, is the 14th 747-8 Freighter the cargo carrier has ordered from Boeing.

“The Cargolux Board of Directors approved the order of our 14th 747-8 Freighter almost 35 years to the day that the airline took delivery of its first 747 Freighter ever,” said Richard Forson, interim president and CEO of Cargolux. “This shows how pleased we, as an all-747 cargo operator, are with the performance and economics of this new generation aircraft and underlines the importance of the role of the 747 overall in the success of our company.”

Cargolux was the world’s first operator of the 747-8 Freighter, taking its first delivery of the airplane type in October 2011. Since then, the airline has taken a total of nine 747-8 Freighters, providing the carrier with increased cargo capacity coupled with excellent economic performance. With today’s announcement, Cargolux has a total of five unfilled orders for 747-8 Freighters.

As well as being one of the launch customers for the 747-8 Freighter, Cargolux also took delivery of the first ever 747-400 Freighter in November 1993. The all-Boeing carrier has a fleet comprised entirely of 747-400 Freighters and 747-8 Freighters.

Copyright Photo: Arnd Wolf/AirlinersGallery.com. Boeing 747-8R7F LX-VCD (msn 35809) taxies at Munich.

Cargolux: AG Slide Show

AirBridgeCargo add its fifth Boeing 747-8 freighter, reports its growth in 2013

AirBridgeCargo-ABC (Moscow), part of Volga-Dnepr Group and Russia’s largest cargo airline, recently celebrated the delivery of the airline’s fifth 747-8 Freighter (VQ-BRJ, msn 37670) on December 27, 2013.

With delivery of the fifth 747-8 Freighter, AirBridgeCargo continues to follow its long-term fleet modernization strategy to further improve the quality of its product. The new aircraft will be used on ABC’s existing route network linking Europe, Asia and the United States via the airline’s hub in Moscow.

At present AirBridgeCargo’s fleet consists of 12 Boeing 747s, including five Boeing 747-400ERFs (Extended Range Freighters), three Boeing 747-400 Freighters and five Boeing 747-8 Freighters.

The carrier achieved a 5% growth in cargo tonnage in 2013, with its highest ever volume of 340,000 tons across its network linking Europe, Russia, Asia and North America.

The airline reported volume growth on all of its major routes and this was matched by a 5% improvement in revenue. AirBridgeCargo’s Freight Ton-Kilometers (FTK) rose 15% in 2013, while its average load factor of 72% show a marginal 1.7% gain over the previous year.

Despite challenging market conditions in 2013, ABC continued with its long-term fleet modernisation strategy and took delivery of two more new generation freighters Boeing 747-8F. With the delivery of its fifth Boeing 747-8F in December 2013, AirBridgeCargo  completed its fleet renewal plan which began two years ago. This investment has reduced the average age of its aircraft fleet from nine years at the end of 2011 to three years at the end of 2013. At present, ABC’s fleet is one of the youngest in the air cargo industry.

AirBridgeCargo took delivery of its first Boeing 747-8F (VQ-BLQ) (see above) in January 2012, with the second and third aircraft joining its fleet in March and December 2012. The fourth new generation freighter entered service with ABC in September last year. As part of the modernization program, ABC removed four older aircraft from its fleet; two Boeing 747-200F, one Boeing 747-300F and a Boeing 747-400ERF. A further 747-400ERF will leave its fleet in 2014.

In 2013, AirBridgeCargo joined the Olympic movement with the delivery of 126 tons of broadcasting equipment as well as 214 tons of sports and lighting equipment for the 2014 Winter Olympics taking place in the Russia City of Sochi in February. The flights were performed using Boeing 747 and Boeing 737 cargo aircraft.

Copyright Photo: Bernhard Ross/AirlinersGallery.com. The first, Boeing 747-8HVF VQ-BLQ (msn 37581) taxies at Frankfurt.

AirBridgeCargo Airlines: AG Slide Show

Boeing reports fourth quarter and 2013 financial results and onward guidance

The Boeing Company (Chicago) reported fourth-quarter revenue of $23.8 billion and core earnings per share (non-GAAP) that increased 29 percent* to $1.88, driven by strong performance across the company’s businesses and higher deliveries (Table 1). Fourth-quarter core operating earnings (non-GAAP) of $1.8 billion includes a $406 million non-cash charge to settle A-12 litigation dating back to 1991, retiring a longstanding risk to the company. Excluding the A-12 charge, fourth-quarter 2013 core operating earnings increased 22 percent* to $2.2 billion and core operating margin increased to 9.4 percent*. Core and GAAP earnings per share includes a charge of $0.34 per share related to A-12 partially offset by a benefit of $0.28 per share for a tax regulation change.

Revenue rose 6 percent in the full year to a record $86.6 billion and core earnings per share increased 20 percent* to a record $7.07. Full-year 2013 GAAP earnings per share was $5.96.

Core earnings per share guidance for 2014 is set at between $7.00 and $7.20, while GAAP earnings per share guidance is established at between $6.10 and $6.30. Revenue guidance is between $87.5 and $90.5 billion, including commercial deliveries of between 715 and 725. Operating cash flow before pension contributions* is expected to be approximately $7 billion, while operating cash flow guidance is set at approximately $6.25 billion.

“Strong fourth-quarter results underscored an outstanding full year of core operating performance that drove record revenue and earnings and increased returns to shareholders,” said Boeing Chairman and Chief Executive Officer Jim McNerney.

“Our Commercial Airplanes business accelerated delivery of its record backlog by successfully increasing production rates while also achieving important development milestones on the 737 MAX and 787-9 and launching the new 787-10 and 777X models with an unprecedented customer response. Our Defense, Space & Security unit overcame a tough operating environment to record expanded revenue, earnings and margins while executing to our commitments on the KC-46A tanker and developing and delivering important new capabilities to customers, such as the P-8 maritime aircraft and the Inmarsat-5 satellite,” said McNerney.

“For 2014, we remain focused on maintaining our commercial airplanes market leadership, strengthening and repositioning our defense, space and security business and continuing to meet the needs of our customers by improving productivity, executing to development plans and delivering our unmatched portfolio of innovative aerospace products and services.”

Table 2. Cash Flow Fourth Quarter Full Year
(Millions) 2013 2012 2013 2012
Operating Cash Flow Before Pension Contributions* $1,409 $4,204 $9,721 $9,058
      Pension Contributions ($29) ($37) ($1,542) ($1,550)
Operating Cash Flow $1,380 $4,167 $8,179 $7,508
Less Additions to Property, Plant & Equipment ($638) ($495) ($2,098) ($1,703)
Free Cash Flow* $742 $3,672 $6,081 $5,805

Operating cash flow in the quarter was $1.4 billion, reflecting commercial airplane production rates, strong core operating performance and timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 7.6 million shares for $1.0 billion and paid $0.4 billion in dividends, reflecting a 10 percent increase in dividends paid compared to the same period of the prior year. Based on the strong cash generation and outlook, in December, the board of directors authorized an additional $10 billionshare repurchase program and raised the quarterly dividend 50 percent.

Table 3. Cash, Marketable Securities and Debt Balances Quarter-End
(Billions) Q4 13 Q3 13
Cash $9.1 $10.0
Marketable Securities 1 $6.2 $5.9
Total $15.3 $15.9
Debt Balances:
The Boeing Company, net of intercompany loans to BCC $7.0 $7.0
Boeing Capital Corporation, including intercompany loans $2.6 $2.6
Total Consolidated Debt $9.6 $9.6
1 Marketable securities consists primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities totaled $15.3 billion at year-end (Table 3), down from$15.9 billion at the beginning of the quarter. Debt was $9.6 billion, unchanged from the beginning of the quarter.

Total company backlog at year-end was a record $441 billion, up from $415 billion at the beginning of the quarter, and included net orders for the quarter of $48 billion. Backlog is up $51 billion from prior year-end, reflecting $135 billion of net orders in 2013.

Segment Results

Boeing Commercial Airplanes

Table 4.  Fourth Quarter Full Year
($ in Millions) 2013 2012 Chg 2013 2012 Chg
Deliveries 172 165 4% 648 601 8%
Revenues $14.6B $14.1B 4% $52.9B $49.1B 8%
Earnings-Ops $1,506 $1,266 19% $5,795 $4,711 23 %
Opg Margin 10.3% 8.9% 1.4 Pts 10.9% 9.6% 1.3 Pts

Boeing Commercial Airplanes fourth-quarter revenue increased to $14.7 billion and full-year revenue increased to a record $53 billion on higher delivery volume. Fourth-quarter operating margin improved to 10.3 percent and full-year operating margin grew to 10.9 percent on the higher volume, favorable delivery mix and continued strong operating performance (Table 4).

During the quarter, the company launched the 777X with 259 orders and commitments. During the year, the 787 program completed first flight of the 787-9, successfully launched the 787-10 and began operating at a 10 per month production rate in final assembly. The 737 program delivered at a record production rate of 38 per month and has won nearly 1,800 firm orders for the 737 MAX since launch. In 2013, a record 648 commercial aircraft were delivered. In January 2014, the company reached an eight-year contract extension through 2024 with the International Association of Machinists & Aerospace Workers District 751 (IAM).

Commercial Airplanes booked 465 net orders during the quarter and 1,355 during the year. Backlog remains strong with 5,080 airplanes valued at a record $374 billion.

Boeing Defense, Space & Security

Table 5.  Fourth Quarter Full Year
(Dollars in Millions) 2013 2012 Chg 2013 2012 Chg
Revenues
Boeing Military Aircraft $4,395 $4,037 9% $15,936 $16,019 (1)%
Network & Space Systems $2,272 $2,024 12% $8,512 $7,911 8%
Global Services & Support $2,188 $2,282 (4)% $8,749 $8,677 1%
Total BDS Revenues $8,855 $8,343 6% $33,197 $32,607 2%
Earnings from Operations
Boeing Military Aircraft $441 $313 41% $1,465 $1,489 (2)%
Network & Space Systems $233 $138 69% $719 $562 28%
Global Services & Support $280 $300 (7)% $1,051 $1,017 3%
Total BDS Earnings from Ops $954 $751 27% $3,235 $3,068 5%
Operating Margin 10.8% 9.0% 1.8 Pts 9.7% 9.4% 0.3 Pts

Boeing Defense, Space & Security’s fourth-quarter revenue increased 6 percent to $8.9 billion, while operating margin increased to 10.8 percent (Table 5). For the full year, revenue increased 2 percent to$33.2 billion, while operating margin increased to 9.7 percent.

Boeing Military Aircraft (BMA) fourth-quarter revenue increased to $4.4 billion, reflecting higher deliveries. Operating margin increased to 10.0 percent, reflecting the higher deliveries and strong performance. During the quarter, BMA achieved Initial Operating Capability (IOC) on the P-8A Poseidon aircraft.

Network & Space Systems (N&SS) fourth-quarter revenue increased to $2.3 billion, reflecting higher delivery volume and mix, and operating margin increased to 10.3 percent on strong performance. During the quarter, N&SS was awarded a contract for a fourth Inmarsat-5 satellite.

Global Services & Support (GS&S) fourth-quarter revenue was $2.2 billion, reflecting lower volume in integrated logistics. Operating margin was 12.8 percent. During the quarter, GS&S was awarded contracts for the B-52 and B-1 bomber modifications and upgrades.

Backlog at Defense, Space & Security was $67 billion, of which 37 percent represents orders with international customers.

Additional Financial Information

Table 6. Additional Financial Information Fourth Quarter Full Year
(Dollars in Millions) 2013 2012 2013 2012
Revenues
Boeing Capital Corporation $105 $129 $408 $468
Other segment $22 $27 $102 $106
Unallocated items and eliminations $123 ($358) ($65) ($610)
Earnings from Operations
Boeing Capital Corporation $9 ($12) $107 $88
Other segment income/(expense) ($99) $31 ($156) ($186)
Unallocated items and eliminations excluding unallocated pension/postretirement expense ($532) ($200) ($1,105) ($492)
Unallocated pension/postretirement expense ($323) ($212) ($1,314) ($899)
Other income, net $15 $23 $56 $62
Interest and debt expense ($96) ($112) ($386) ($442)
Effective tax rate 14.0% 36.3% 26.4% 34.0%

At quarter-end, Boeing Capital Corporation’s (BCC) net portfolio balance was $3.9 billion down from $4.1 billion at the beginning of the quarter. BCC’s debt-to-equity ratio was 5.0-to-1. Other segment earnings decreased $130 million in the quarter partly due to higher asset impairment expense.

Unallocated items and eliminations excluding unallocated pension/postretirement expense increased in the fourth quarter of 2013 primarily due to a $406 million charge associated with the A-12 settlement. Total pension expense for the fourth quarter was $717 million, up from $576 million in the same period last year. The company’s income tax expense was $201 million in the quarter, compared to $557 million in the same period of the prior year, due to a $212 million benefit recorded in fourth-quarter 2013 for a tax regulation change.

Outlook

The company’s 2014 financial guidance (Table 7) reflects continued strong performance in both businesses.

Table 7. Financial Outlook
(Dollars in Billions, except per share data) 2014
The Boeing Company
Revenue $87.5 – 90.5
Core Earnings Per Share* $7.00 – 7.20
Earnings Per Share $6.10 – 6.30
Operating Cash Flow Before Pension Contributions* ~ $7
Operating Cash Flow 1 ~ $6.25
Boeing Commercial Airplanes
Deliveries 2 715 – 725
Revenue $57.5 – 59.5
Operating Margin ~ 10%
Boeing Defense, Space & Security
Revenue
Boeing Military Aircraft ~ $15
Network & Space Systems ~ $7.7
Global Services & Support ~ $7.8
Total BDS Revenue $30 – 31
Operating Margin
Boeing Military Aircraft ~ 9.5%
Network & Space Systems ~ 8.5%
Global Services & Support ~ 10.5%
Total BDS Operating Margin ~ 9.5%
Boeing Capital Corporation
Portfolio Size Lower
Revenue ~ $0.3
Pre-Tax Earnings ~ $0.05
Research & Development ~ $3.2
Capital Expenditures ~ $2.5
Pension Expense 3 ~ $3.1
Effective Tax Rate 4 ~ 31%
1 After discretionary cash pension contributions of $0.75 billion and assuming new aircraft financings under $0.5 billion
2 Assumes approximately 110 787 deliveries
3 Approximately $1.1 billion is expected to be recorded in unallocated items and eliminations
4 Assumes the extension of the research and development tax credit
* Non-GAAP measures. Complete definitions of Boeing’s non-GAAP measures are on page 7, “Non-GAAP Measures Disclosures.”

Boeing’s 2014 revenue guidance is established at between $87.5 and $90.5 billion. Core earnings per share guidance is set at between $7.00 and $7.20, and earnings per share guidance is expected to be between $6.10 and $6.30. Total company 2014 operating cash flow before pension contributions is expected to be approximately $7 billion, while operating cash flow is expected to be approximately $6.25 billion in 2014, including $0.75 billion of discretionary pension contributions. Total company pension expense in 2014 is expected to be approximately $3.1 billion (of which approximately $2.0 billion is expected to be recorded in core operating earnings and $1.1 billion recorded in unallocated items and eliminations).

Commercial Airplanes’ 2014 deliveries are expected to be between 715 and 725, which includes approximately 110 787 deliveries. Revenue at Commercial Airplanes is expected to be between $57.5 and $59.5 billion with operating margins of approximately 10 percent. Defense, Space & Security’s revenue for 2014 is expected to be between $30 and $31 billion with operating margins of approximately 9.5 percent.

Boeing Capital Corporation expects that its aircraft finance portfolio will continue to decline in 2014, as new aircraft financing of less than $0.5 billion is expected to be lower than normal portfolio runoff through customer payments and depreciation. Boeing’s 2014 R&D forecast is approximately $3.2 billion, and capital expenditures for 2014 are expected to be approximately $2.5 billion. Boeing’s effective tax rate is expected to be approximately 31 percent in 2014, which assumes the extension of the research and development tax credit.

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company’s ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:

Core Operating Earnings, Core Operating Margin and Core Earnings Per Share

Core operating earnings is defined as GAAP earnings from operations excluding unallocated pension and post-retirement expense. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP diluted earnings per share excluding the net earnings per share impact of unallocated pension and post-retirement expenseUnallocated pension and post-retirement expense represents the portion of pension and other post-retirement costs that are not recognized by business segments for segment reporting purposes. Management uses core operating earnings, core operating margin and core earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude unallocated pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and non-GAAP measures is provided on page 14.

Core Operating Margin and the Increase in Core Operating Earnings Excluding A-12 Settlement Charge

The company is disclosing the core operating margin and the increase in core operating earnings in the fourth quarter of 2013 over the fourth quarter of 2012 excluding the A-12 settlement charge in the fourth quarter of 2013. Management believes it is useful to occasionally exclude certain items that are not reflective of underlying performance and that can distort period to period performance comparisons. Management uses similar measures for purposes of evaluating and forecasting underlying business performance. A reconciliation between the GAAP and non-GAAP measures is provided on page 14.

Operating Cash Flow Before Pension Contributions

Operating cash flow before pension contributions is defined as GAAP operating cash flow less pension contributions. Management believes operating cash flow before pension contributions provides additional insights into underlying business performance. Management uses operating cash flow before pension contributions as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and operating cash flow before pension contributions.

Free Cash Flow

Free cash flow is defined as GAAP operating cash flow less capital expenditures for property, plant and equipment additions. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and free cash flow.

Copyright Photo: Nick Dean/AirlinersGallery.com. Boeing 747-8KZF N50217 (msn 36137) became JA12KZ on delivery.

Boeing delivers 648 new airplanes in 2013, a new company record and 1,355 net commercial orders

Boeing (Chicago) set a company record in 2013 for the most commercial airplanes delivered in a single year with 648. The company’s unfilled commercial orders stood at 5,080 at the end of the year – also a new Boeing record.

Boeing also booked 1,531 gross commercial orders in 2013, a new company record and 1,355 net commercial orders in 2013, the second-largest number in company history.

In 2013, three programs set records for deliveries in single year:

  • The 737 program delivered 440 Next-Generation 737s
  • The 777 program delivered 98 airplanes
  • The 787 program delivered 65 Dreamliners, now flying with 16 customers around the world

With the higher production rates achieved in 2013, all three Boeing Commercial Airplanes production sites in Everett and Renton, Washington and North Charleston, South Carolina also delivered a record number of airplanes.

Boeing’s leadership position in the twin-aisle market continued in 2013 with the launch of two new airplane programs. The 777X launched in November at the Dubai Air Show with 259 orders and commitments worth more than $95 billion at list prices. Boeing also launched the 787-10 Dreamliner, the most fuel-efficient jetliner in history, at the Paris Air Show in June.

Orders, deliveries and unfilled orders as of December 31, 2013, by program were as follows:

Family Gross Orders Net Orders Deliveries Unfilled Orders
737 1,208 1,046 440 3,680
747 17 12 24 55
767 2 2 21 49
777 121 113 98 380
787 183 182 65 916
Total 1,531 1,355 648 5,080

Boeing Commercial Airplanes highlights in 2013 included:

  • Boeing Delivers 7,500th 737
  • Boeing, Southwest Airlines Announce Launch of 737 MAX 7
  • Boeing Opens New Everett Delivery Center
  • Boeing Delivers 1,000th Airplane to China
  • Boeing Launches 787-10 Dreamliner
  • Boeing Begins Assembly of 1st KC-46A Tanker Aircraft
  • Boeing Flies First 787-9 Dreamliner
  • Boeing Completes 737 MAX 8 Firm Configuration
  • Boeing to Increase 737 Production Rate in 2017
  • Boeing, GOL Airlines Announce Collaboration to Increase Sustainable Aviation Biofuel Supply in Brazil
  • Boeing 787 Dreamliner Reaches 1,000th Order with Etihad Airways
  • Boeing Launches 777X with Record-Breaking Orders and Commitments
  • Boeing Delivers First 747-8 with Performance-Improved Engines

Copyright Photo: Nick Dean/AirlinersGallery.com. Boeing 747-8R7F N747EX (msn 35808) lands at Paine Field near Renton.

Cathay Pacific orders an additional Boeing 747-8 freighter and three 777-300 ERs

Cathay Pacific Airways (Hong Kong) and Boeing (Chicago) announced the airline has ordered an additional 747-8 Freighter and three 777-300 ER (Extended Range) airplanes. The order, valued at about $1 billion at current list prices, will bolster Cathay Pacific’s 747-8 Freighter fleet and 777-300ER fleet to 14 and 53, respectively.

Hong Kong’s flag carrier is in the midst of renewing its freighter fleet with newer, more efficient airplanes, while also looking to strengthen its position as a market leader in the air cargo business.

The 747-8 Freighter gives cargo operators the lowest operating costs and best economics of any large freighter airplane while providing enhanced environmental performance. At 250 feet, 2 inches (76.3 m) long — 18 feet, 4 inches (5.6 m) longer than the 747-400 Freighter — the 747-8 Freighter gives customers 16 percent more revenue cargo volume compared to its predecessor with nearly equivalent trip costs and lower ton-mile costs.

The Boeing 777 is the world’s most successful twin-engine, long-haul airplane. The 777-300ER is equipped with the world’s most powerful GE90-115B commercial jet engine, and can seat up to 386 passengers in a three-class configuration with a maximum range of 7,930 nautical miles (14,685 km).

Hong Kong’s flag carrier operates 55 777s, including 38 777-300 ERs and an all-Boeing freighter fleet that includes 13 747-8 Freighters. With this order, Cathay Pacific will have 21 777-9X airplanes, 15 777-300 ERs and one 747-8 Freighter on order with Boeing.

Top Copyright Photo: Nick Dean/AirlinersGallery.com. Brand new Boeing 747-867F B-LJI (msn 39247) lifts off the runway at Paine Field near Everett, Washington.

Cathay Pacific: AG Slide Show

Bottom Copyright Photo: Michael B. Ing/AirlinersGallery.com. The Stretch Triple Seven is becoming the mainstay of the Cathay Pacific long-range passenger aircraft fleet as the Boeing 747-400 replacement. Sleek Boeing 777-367 B-KPN (msn 36165) steadily climbs away from the runway at Los Angeles International Airport (LAX).

Boeing delivers first 747-8 performance-improved engines to Cathay Pacific

Boeing (Chicago) yesterday (December 18) delivered the first 747-8 (747-867F B-LJK, msn 43394) to Cathay Pacific Airways (Hong Kong) with performance-improved GEnx-2B engines as part of the airplane’s Performance Improvement Package (PIP.) B-LJK was the first 747 to deliver with the PIP engines.

The engine is the first of the package’s three improvements to enter service. The two other components, Flight Management Computer (FMC) software upgrades and reactivation of the horizontal tank fuel system on the 747-8 Intercontinental, are expected to enter service later this month and in early 2014, respectively.

The PIP engine improves the airplane’s efficiency by 1.8 percent. “With this improvement, 747-8 customers will use roughly 30 less semi-sized trucks of fuel per airplane per year,” said Bruce Dickinson, 747-8 chief project engineer and vice president.

All three PIP components can be retrofitted on the 747-8. The tail fuel reactivation is applicable only for the 747-8 Intercontinental and the FMC upgrades can also be made to 747-400s.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Sister ship Boeing 747-867F B-LJJ (msn 39246) climbs away from the runway at Los Angeles International Airport.

Cathay Pacific: AG Slide Show

Atlas Air to operate a Boeing 747-800F for BST Logistics in Hong Kong

Atlas Air Worldwide Holdings, Inc. (New York) has announced that its Atlas Air, Inc. (New York-JFK) unit has entered into a contract with BST Logistics (Hong Kong) Company Limited (BST Logistics), a business partner of Navitrans International Freight Forwarding Co., Ltd., to provide Boeing 747-8 freighter service.

The contract is for one aircraft under an ACMI (Aircraft, Crew, Maintenance and Insurance) agreement, with service expected to begin in February 2014 and operating in key global routes connecting the U.S., Europe and Asia.

BST Logistics provides dedicated airfreight services on a global basis and serves some of the largest shippers in the world.

Copyright Photo: Nick Dean/AirlinersGallery.com. Atlas Air’s Boeing 747-87UF N854GT (msn 37566) departs from Paine Field near Everett.

Atlas Air: AG Slide Show

Silk Way Airlines signs MOU for four Boeing 747-800F freighters

Silk Way Airlines (Silkway Azerbaijan Cargo) (Baku) has signed a Memorandum of Understanding (MOU) with Boeing for four new Boeing 747-800F freighters according to cargofacts.net.

Read the full report: CLICK HERE

Copyright Photo: OSDU. Silk Way currently operates three Boeing 747-400F freighters and two 767-300F freighters besides its Russian aircraft. Boeing 747-4R7F 4K-800 (msn 29729) completes its final approach into Moscow (Shereyetyevo).

Silk Way Airlines: AG Slide Show

Silk Way logo-1

Route Map:

Silk Way 3:2013 Route Map

 

Cargolux to take delivery of the first Boeing 747-800F Freighter on September 19

Boeing (Chicago) will deliver the first 747-800F Freighter to launch customer Cargolux Airlines International (Luxembourg) on September 19, 2011 at Paine Field in Everett. Cargolux will fly the airplane away that morning and put the airplane into revenue service. Boeing will celebrate the first delivery with Cargolux, employees and other stakeholders the following day at the Everett factory. Cargolux will take delivery of the second 747-8 Freighter on September 21. The carrier has a total of 13 of the airplanes on order.

Visit our new website (rate the photos): CLICK HERE

Copyright Photo: Nick Dean. Please click on the photo for additional information.

Boeing receives the type certificate for the new Boeing 747-800F freighter, Cargolux to take delivery next month

Boeing (Chicago) today received U.S. Federal Aviation Administration (FAA) and European Aviation Safety Agency (EASA) certification Friday for the new 747-8 Freighter, passing two of the final landmarks on the airplane’s journey to entry into service. The FAA granted Boeing an Amended Type Certificate (ATC) and an Amended Production Certificate for the 747-8 Freighter, while the EASA also granted the company an ATC for the airplane.

With these certificates, the program is in the final stages of preparing to deliver the first 747-8 Freighter to launch customer Cargolux in early September 2011.

The Amended Type Certificate acknowledges that the FAA and EASA have certified that the design of the 747-8 Freighter is compliant with all aviation regulatory requirements and will produce a safe and reliable airplane. The airplane logged more than 3,400 hours of flight testing and many thousands more of ground, part, component, materials and other testing on the road to certification.

Visit our new website: CLICK HERE

Copyright Photo: Nick Dean. Please click on the photo for additional information.

New Boeing 747-8 Freighter completes certification flight testing

Boeing (Chicago) yesterday announced the 747-8 Freighter successfully completed its certification flight test program Tuesday, with two airplanes landing at Paine Field in Everett, Washington. Flight test airplane RC522 completed testing of the flight management computer (FMC) and RC523 completed function & reliability (F&R) testing.

The first 747-8 Freighter is scheduled to be delivered to launch customer Cargolux in September after certification from the U.S. Federal Aviation Administration (FAA).

The 747-8 Freighter has flown more than 1,200 flights and 3,400 hours since its first flight February 8, 2010. During that time, the five-airplane test fleet was used to gather data for more than 1,700 FAA certification requirements. Boeing tested the capabilities of these airplanes far beyond what they are expected to encounter in normal service. Tests concluded with F&R testing, a final phase in which an airplane must accrue 300 FAA-approved flight hours in its final delivery configuration.

Copyright Photo: Michael B. Ing. Please click on the photo for additional information.

Boeing 747-8 Freighter to fly to Paris Air Show on sustainable biofuel

Boeing (Chicago) will fly the new 747-8 Freighter to its international air show debut in a doubly historic fashion, flying the airplane across the Atlantic Ocean to the Paris Air Show using a renewable aviation jet fuel – the world’s first transatlantic crossing of a commercial jetliner using biologically derived fuel.

Camelina, the plant source used to create the biofuel, was grown in Montana and processed by Honeywell’s UOP. Boeing does not need to make any changes to the airplane, its engines or operating procedures prior to departure to accommodate biofuel use. Normal flight parameters are being followed and were approved in advance by the U.S. Federal Aviation Administration.

The airplane will be on static display at the Paris Air Show June 21 and 22. It is scheduled to leave the air show the evening of June 22 and fly to Cargolux headquarters at Luxembourg for a two-day visit. Cargolux is scheduled to take delivery of the first 747-8 Freighter to enter service this summer.

Boeing pilots Capt. Keith Otsuka and Capt. Rick Braun and Cargolux Capt. Sten Rossby will fly the airplane with each of the 747-8 Freighter’s four GE GEnx-2B engines powered by a blend of 15 percent camelina-based biofuel mixed with 85 percent traditional kerosene fuel (Jet-A). The airplane is scheduled to arrive at Le Bourget Airport Monday at about 5 p.m. Paris local time (15:00 GMT) after a 4,989-mile (8,029 km, 4,335 nautical mile) trip.

Copyright Photo: Nick Dean. Please click on the photo for additional information.

Boeing to have two 747-800s, one 787 and one 737-700 with the Sky Interior on display at the Paris Air Show

Boeing (Chicago) is planning to have two 747-800s, one 787 Dreamliner, one 737-700 with the Sky Interior and various military aircraft on display at the Paris Air Show later this month.

Copyright Photo: Michael B. Ing. Please click on the photo for the full details.

Boeing puts a fifth 747-800 freighter into testing

Boeing (Chicago, Seattle, Wichita and Charleston) successfully conducted the first flight of the fifth 747-8 Freighter on Thursday (February 3). The airplane, coded as RC523, took off from Paine Field (PAE) in Everett, WA, for a 3-hour, 30-minute flight before returning to Paine Field.

The flight included a standard 2-hour, 30-minute “B1″ flight profile that Boeing conducts on all production airplanes prior to delivery, plus an hour of engineering testing woven into the profile.

This is the fifth 747-8 Freighter being used in the flight-test program. Each airplane is used for a specific set of tests, with this airplane focusing on functionality and reliability testing.

The airplane will remain based at Paine Field throughout its test plan.

Boeing delays the delivery of the first Boeing 747-8F

Boeing (Chicago, Seattle, Wichita and Charleston) today announced a schedule change for the 747-8 Freighter with the first delivery now expected to be in mid-year 2011. The company also announced steps it is taking to support the new schedule, including adding a fifth airplane to the flight-test fleet.

Boeing previously indicated that, following recent flight-test discoveries, there was a high probability the first 747-8 Freighter delivery would move into 2011. According to Boeing the new delivery schedule follows a thorough assessment of the expected cumulative impact of these discoveries, which include a low-frequency vibration in certain flight conditions and an underperforming aileron actuator. While neither issue requires structural changes to the airplane, they have led to disruptions to certification testing, which the program was unable to offset within the prior schedule.

Copyright Photo: Nick Dean. Boeing 747-8R7F N5573S will become LX-VCC (msn 35807) for launch customer Cargolux Airlines International.

Atlas Air’s Global Supply Systems to operate three Boeing 747-800F freighters for British Airways

Copyright Photo: Pedro Pics. The current three Boeing 747-400F freighters are expected to replaced by the new 747-800Fs. 747-47UF (msn 29252) is pictured at the STN base.

Atlas Air Worldwide Holdings (New York-JFK) confirmed that its 49%-owned UK subsidiary, Global Supply Systems Limited (GSS) (London-Stansted), has signed a five-year wet leasing agreement with British Airways Plc to operate three Boeing 747-8 freighters on behalf of British Airways starting in 2011.

Under this long-term aircraft, crew, maintenance and insurance (ACMI) outsourcing contract, GSS will provide a turnkey solution for British Airways’ cargo division, British Airways World Cargo (BAWC). GSS will lease the 747-8F aircraft that it will operate for BAWC from AAWW’s Atlas Air unit, which expects to take delivery of the aircraft from Boeing in early 2011.

Boeing appropriately reports a net profit of $787 in the 2Q

Boeing (Chicago, Seattle, Wichita and Charleston) reported a second quarter net profit of $787 million, down from $998 million in the same quarter a year ago.

For the full report:

CLICK HERE

Copyright Photo: Nick Dean. While the 787 Dreamliner captures most of the headlines, the new 747-8 continues to move ahead too. Third test aircraft, 747-8KZF N5017Q (msn 36136) is pictured on the ramp at Everett (Paine Field).

Boeing 747-8 Freighter Receives Expanded Type Inspection Authorization

Boeing (Chicago, Seattle, Wichita and Charleston) received expanded type inspection authorization (TIA) from the U.S. Federal Aviation Administration (FAA) for the 747-8 Freighter on June 11. This authorization clears the way for FAA personnel to participate in test flights and collect required data.

With the issuance of TIA, the 747 program is beginning expanded certification testing. During this phase of testing, the extremes of the flight envelope are explored. Testing conditions include operations in hot and cold weather as well as takeoffs and landings at high-altitude airports. In addition, over-speed conditions, hard landings and engine-out conditions are tested.

The entire flight-test program calls for a total of about 3,700 hours of ground and air testing. The first 747-8 Freighter delivery is planned for the fourth quarter of this year. The first customer is Cargolux.

Copyright Photo: Nick Dean. The third 747-8F test aircraft, Boeing 747-8KZF N5017Q (msn 36136) is seen at Everett (Paine Field).

Cargolux to introduce a new livery with the first Boeing 747-8F

Copyright Photo: Boeing. Boeing 747-8R7F N55725 (msn 35806) will become LX-VCB on delivery.

Cargolux Airlines International (Luxembourg) is introducing a new livery with the delivery of the first new Boeing 747-8F. The cargo airline is the launch customer for the new type. The first Boeing 747-8 Freighter painted in Cargolux’s livery emerged from the Boeing paint hangar in Everett, WA on June 7.  The cargo operator has a total of 13 Boeing 747-8 Freighters on order.

Boeing delivered the last Cargolux 747-400 Freighter with a unique transition paint scheme featuring fading stripes. The new livery on Cargolux’s 747-8 Freighter is an evolution from the current design and marks the start into a new era for the company.

“The design stands for continuity and commitment while confirming the fundamental principles that made Cargolux successful. The red, white and blue stripes symbolize the company’s roots in Luxembourg, its hub and home base,” said Ulrich Ogiermann, CEO of Cargolux. The new livery features a distinctive new red tail and an additional logo on the belly further promotes the brand.

Boeing will deliver the first 747-8 Freighter to Cargolux in the fourth quarter of this year.

Boeing 747-8KZF N5017Q begins testing in Southern California

Boeing (Chicago, Seattle, Wichita and Charleston) has placed the second Boeing 747-8 Freighter, RC521, the pictured 747-8KZF N5017Q (msn 36136), landed in Palmdale, CA yesterday (April 19), marking the beginning of a planned transition of 747-8 Freighter testing to Southern California. The more than four-hour flight from Boeing Field in Seattle included testing on avionics and cruise performance.

The airplane will be stationed in Palmdale for the majority of its scheduled flight-test program. The crew will conduct several tests on the airplane with fuel-mileage and engine-performance testing as key focus areas.

A contingent of employees has been stationed at Palmdale for the testing, including flight-test engineers and the support personnel who prepare the airplane for each day’s flights. In the coming weeks, the two other 747-8 airplanes in the flight-test fleet will join RC521 in Southern California.

The entire flight-test program calls for the three airplanes to perform a total of about 3,700 hours of ground and air testing. The first 747-8 Freighter delivery to Cargolux is planned for the fourth quarter of this year.

Copyright Photo: Joe G. Walker. N5017Q is pictured at Seattle (Boeing Field-King County) prior to the departure to Palmdale.

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