UPS places repeat order with Boeing for 767 freighters

UPS will buy eight more 767-300 freighters from Boeing to support domestic and international demand for parcel shipping, driven by e-commerce, and fleet replenishment, the companies announced Monday.

The order comes nine months after Atlanta-based UPS (NYSE: UPS) placed an order for 19 of the Boeing (NYSE: BA) cargo jets and will increase UPS’ 767 fleet to 108 aircraft. 

“This is a very versatile aircraft that we operate across every region of the globe,” said Nando Cesarone, UPS executive vice president and president U.S. “With these aircraft, our fleet will continue to be among the most modern in our industry, meeting our customers’ needs while improving our efficiency, sustainability and reliability.”

Boeing’s 20-year outlook envisions air cargo volumes gaining at a 4.1% compound annual clip. Airbus projects slower growth, but that the express sector will grow 4.9% per year.

UPS will begin taking delivery of the new airplanes in 2025, with an additional 767-300 Boeing converted freighter entering service in late 2023. 

Based on the 767-300 Extended Range passenger jet, the 767 freighter carries up to tons of cargo payload. The medium-size widebody is used by UPS on regional and international routes. 

UPS was the launch customer for the 767 freighter in 1995 and has purchased a total of 108 of the model. The carrier currently operates 238 Boeing freighters including the 747, 757, 767 and MD-11.

At a list price of about $220 million per aircraft, the UPS deal is worth about $1.7 billion. UPS is expected to get a discount for purchasing multiple aircraft.

UPS Airlines and its pilots this month finalized a two-year contract extension.

UPS is guiding expectations for $102 billion in revenue and 13.7% adjusted operating margin for 2022.

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Source: freightwaves - UPS places repeat order with Boeing for 767 freighters
Editor: Eric Kulisch