But after receiving no net orders for the 747-8 last year, Boeing appears close to completing an order for three of these jumbo aircraft. Does this move signal a turn in jumbo jet fortunes, and are there other factors that could push sales higher?
The latest customer for the Boeing 747-8 is Silk Way West Airlines, a cargo airline from Azerbaijan. Although the order is still being completed, it appears Silk Way is looking to buy three Boeing 747-8 freighter aircraft amounting to $1.1 billion using list prices. However, considering aircraft are often sold below list price and given the current pace of 747-8 sales, the airline is unlikely to be paying the full $1.1 billion.
By itself, this order is not enough to make the 747-8 program successful for the year, with only three aircraft being sold. In addition, Silk Way West Airlines is a fairly small carrier, and its decision is unlikely to influence decisions of other major carriers.
However, while the Silk Way order won't turn around jumbo jet sales by itself, there are a few other factors that might help turn the tide.
Airlines can't just land a plane wherever they want, and demand for space that's outstripping supply has caused certain high-demand airports to become slot-constrained. Among the airports with the most in-demand space is London's Heathrow Airport, which finds itself particularly popular with high-paying business travelers.
Since airlines receive slots that allow for one takeoff or landing, some airlines are trying to bring more passengers in through Heathrow by using larger aircraft such as the Airbus A380.
There have been various proposals for dealing with London's tight airport situation, but with a solution still years away from being fully implemented, larger aircraft may become the solution to Heathrow's slot restrictions.
Although the A380 is grabbing the most attention at Heathrow, the 747-8 could still stand to benefit if other airlines choose it over the A380 to fulfill the need for jets with higher passenger capacity.
Besides Heathrow, there are plenty of other slot-restricted airports worldwide, and while not all airports can accommodate the largest of jets, those that can could give airlines a reason to keep some jumbo jets in their fleets.
One of the biggest negatives about jumbo jets is their fuel consumption. Reducing fuel costs has led many carriers to use aircraft such as the Boeing 777 or to place orders for the Airbus A350 which can still carry a large number of people but use less fuel in the process.
As both aviation followers and everyday drivers know, fuel prices have fallen sharply in the past few months, resulting in aviation fuel that costs about half as much as it did before the decline.
If fuel prices stay at these levels, operating jumbo jets could become more cost-competitive with the slightly smaller aircraft that have been replacing them. But the question is whether carriers would want to commit themselves to multibillion-dollar aircraft orders when fuel prices may have rebounded by the time of aircraft delivery.
For an airline to use current fuel prices as a rationale for placing a jumbo jet order, the airline would have to expect fuel prices to stay low for several years, since operating the aircraft would have to remain cost-effective for the life of the aircraft.
I imagine airlines that are planning for the long term are thinking twice about ordering the Boeing 747-8 or Airbus A380 just because of the recent fuel price decline.
The Boeing 747-8 and Airbus A380 are putting up disappointing results so far, but that doesn't mean the jumbo jet business is dead. Both manufacturers have discussed making further improvements to their respective jumbo jet offerings, but the question will be whether companies with finite resources will use those resources to try to turn around the jumbo jet programs or to fight for currently more lucrative markets.
Although there are clear differences between the 747-8 and the A380, notably in that the A380 is larger and is often referred to as a superjumbo, if one manufacturer decided there wasn't enough demand to support both jets, one jet may be retired. That situation could allow the other jet to be supported as the only one of its size on the market.
The bottom line
Boeing certainly welcomes the Silk Way West Airlines order for a plane that has had sales difficulties over the past few years. But since Silk Way is a relatively small player in the global aviation industry, the order doesn't signal a turnaround in the jumbo jet market by itself.
Investors interested in the future of jumbo jets should watch to see whether Boeing and Airbus invest more money to update their jumbo offerings and how airlines respond to potential jumbo jet improvements.