Silk Way West and Alaska Airlines sign freight agreements with Boeing

Silk Way West Airlines, a growing cargo company based in Azerbaijan, and Alaska Airlines signed deals with Boeing on Thursday for two cargo planes each – but that’s where the similarities end.

Silk Way West said it will need two 777-8s, Boeing’s (NYSE: BA) largest available plane and one so modern it’s not even in production yet, while Alaska Airlines uses used 737-800 passenger planes and they will turn into freighters.

Boeing expects to deliver the 777-8 in 2029 and 2030. The Central Asian airline has an option for two more aircraft.

The 777-8 is still in the testing and certification phase, and the first will not enter service until late 2027.

The 777-8, with a maximum payload of 130 tons, is slightly larger than the legacy 777 Freighter, which will be phased out in five years. The planes are expensive, but with advanced GE engines and a composite wing design, they offer 30% better fuel efficiency, lower CO2 emissions and 25% lower operating costs per ton compared to a 747-400. The twin-engine 777-8 has nearly the same payload and range as the four-engine 747-400.

Silk Way West Airlines flies to 40 destinations around the world, including scheduled flights to Chicago O’Hare International Airport and Cincinnati. It has a growing hub in Baku, Azerbaijan, which serves as a transit point for much of the traffic between Europe and Asia.

The 10-year-old company operates a fleet of 12 Boeing 747-400 and 747-8 freighter aircraft. In April 2021 the company ordered five Boeing 777 Freighters and in June it ordered its brand new A350 Freighter from Airbus to compete against the 777-8.

Stan Deal, head of Boeing Commercial Airplanes, and Zaur Akhundov, president and CEO of Silk Way Group, sign a 777-8 Freighter contract in Everett, Washington. (Photo: Boeing)

In a statement, Silk Way Group President Zaur Akhundov referenced the company’s fleet renewal plans and suggested that the 777-8s will replace the aging 747-400s.

Boeing this week released an updated version of its global freight forecast, forecasting continued growth in freight volume and a 60% increase in the global freighter fleet over 20 years. Emirates has also ordered five 777s, a sign that the world’s largest cargo airline has been studying the market and is confident about future growth prospects.

The 777-8 got off to a strong start with 45 firm orders from five customers, including Silk Way West.

Alaska Airlines is transitioning

Meanwhile, Alaska Airlines (NYSE: ALK) provided details on how it will implement a previously announced plan to convert two 737-800 passenger jets in its fleet into cargo planes. The company said in March it would increase its freighter fleet to five planes with two converted 737-800s, but didn’t say who would be doing the modifications.

On Thursday, Alaska Airlines announced that the aircraft will join Boeing’s conversion program through a sale-leaseback transaction with BBAM Aircraft Leasing & Management.

Boeing will outsource work to add a large cargo door, robust interior and cargo handling system to Cooperativa Autogestionaria de Servicios Aeroindustriales (COOPESA), a Costa Rica-based airframe maintenance and repair specialist and Boeing’s new manufacturing partner. The aircraft will be completed in 2023 and early 2024.

Conversions are the only option for airlines wanting a standard freighter as there is no factory built version of the 737-800.

Alaska Airlines’ cargo unit operates three converted Boeing 737-700 cargo aircraft. The 737-800 offers 40% more payload space than the 737-700, almost giving the company the advantage of an additional aircraft. The newer planes can carry nearly 50,000 pounds of cargo and mail.

“We look forward to operating these 737-800s to support Alaska’s supply chain and connect cargo to over 100 cities we serve across North America,” said Adam Drouhard, general manager of Alaska Air Cargo.

Alaska’s fleet of freighters serves 20 communities across Alaska, many of which do not have access to paved roads, and hauls seafood and other goods to locations across the United States

The sale-leaseback maneuver allows Alaska to raise capital and then lease the units back from the lessor to derive benefit from usage.

More FreightWaves/American Shipper stories by Eric Kulisch.

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