UPS just gave Boeing's struggling jumbo jet a $10 billion lifeline

UPS Boeing 747 8BoeingA UPS Boeing 747-8F.

On Thursday, Boeing announced that UPS has placed an order for 14 new 747-8F freighters along with an option for another 14 of the jumbo jets.

With a catalogue price of $379.1 million per plane, the deal could be worth as much as $10.6 billion with the option included.

However, it should be noted that major customers traditionally negotiate substantial discounts over the list price.

“These aircraft are a strategic investment for increased capacity for UPS customers around the globe,” said Brendan Canavan, president, UPS Airlines.

“The 747-8 will allow UPS to upsize our network in both new and existing markets.”

Including, the 14 orders from the UPS and four from Russian cargo carrier Volga-Dnepr Group, Boeing has racked 18 firm orders for the jumbo freighters this year.

As result, 2016 is the 747 program’s most successful sales year since 2006 when Boeing sold 53 of the massive jets.

Boeing has struggled mightily to find new buyers for its iconic jumbo jet over the past decade. With market demand for wide-body commercial airliners skewed almost exclusively towards twin-engine jets such as the company’s own 777 or the Airbus A330, Boeing has come to rely upon the cargo freighter as a lifeline to keep the 747 program alive.

Thursday’s order breathes new air into the 747 program.

Prior to the UPS deal, Boeing had just 15 unfilled orders left for the jumbo jet. In fact, to allow the sales team more time to find new buyers, Boeing slowed production of the aircraft down in September from one per month to just one over other month.

UPS Airlines currently operates a fleet of more than 200 Airbus A300, Boeing 747, 757, 767, and McDonnell-Douglas MD11 freighters.

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