Podcast: Farewell MD-11 As Cargo Market Moves On

Listen in as Aviation Week editors discuss the McDonnell Douglas MD-11’s legacy after news that FedEx and UPS have both announced plans to retire the trijet.

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Rush transcript 

Helen Massy-Beresford:

Hello and welcome to Aviation Week's Check 6 Podcast. I'm Helen Massy-Beresford, European Air Transport Editor at Aviation Week. And I'm here with Jens Flottau, Executive Editor, Commercial Aviation and Guy Norris, Senior Editor specializing in technology and propulsion. We're going to be talking about the cargo market, freighters and one freighter in particular, the MD-11. FedEx and UPS, the two largest remaining operators of the MD-11 freighter have both recently taken the decision to start retiring their fleets. Those decisions come at something of a turning point for the wider cargo sector.

After a boom during the pandemic, the picture's now looking a bit more mixed. That's hardly surprising given what's going on around the world from the war in Ukraine to high fuel prices, labor and supply chain shortages, the Covid hangover and high inflation. IATA's latest figures showed cargo demand was down 14.9% in January with capacity up 3.9%. That came after demand fell 8% year on year in 2022 while capacity rose 3% compared to 2021. But on the other hand, cargo yields are still high and China's reopening is good news for the sector.

Looking further ahead, the e-commerce sector is also set to keep driving cargo demand. A Morgan Stanley report from last year predicted e-commerce could increase from $3.3 trillion today to 5.4 trillion in 2026. And on the manufacturing side, there's confidence too. Airbus and Boeing have both recently launched new freighters and conversion specialists report full order books. So Guy, what do you think triggered these decisions by FedEx and UPS?

Guy Norris:

Yeah, hi Helen. Yeah, I think the sort of situation is, with both operators, they are the largest MD-11 operators. Between the two of them, they've got 94 aircraft currently in operation, which is almost half of the number that were even ever built. So, 200 aircraft made in Long Beach, with production finishing in 2001. But anyway, the point is that the MD-11, the production freighter version was a 90-ton freighter. Most of the ones that are now flying, still flying are converted former airline conversions, but even they have 88 tons capacity. So, between those two models, that's quite a large, that's a significant freighter capacity. So, what we're now seeing is because of the factors you were just mentioning, there's an erosion happening at that top end of the market. You've either got the 747s, and 777 freighters, which are above hundred tons. You've got 767s and other types which are significantly smaller. And in the middle you've got this MD-11 category.

And now what we're seeing certainly is evidence of an erosion in that sector where it's just too big to operate. It's not big enough to be filled like a 747, but it's too big to operate on the other major routes that both of these carriers have. And I'm not saying it's a catastrophic failure, it's just FedEx has decided it's said "We've got new aircraft twin jets coming in, 767s, 777s. It's time to move to a more efficient fleet." And the MD-11 be being a trijet is unfortunately an easy sort of category to begin to draw down as a cost saving issue.

The other factor's, of course, they're getting old, they're the oldest one flying, for example, the prototype is still flying for FedEx. It's 33 years old. So that's taking a lot of maintenance and it's starting to get costly to keep these airplanes going. So, there's a number of factors, but those are the big ones. And when FedEx looked for easy cost savings, they need to save $4 billion by 2025 as part of their streamlining operation. The MD-11 unfortunately, I guess was the target.

UPS is in a similar situation. They're looking at refleeting and they've already started pushing the airplanes into retirement. They're due to retire six of them this year. They've currently got 40, they've already retired, I think at least two, first of which went to the desert in January.

Helen Massy-Beresford:

Jens, as Guy just mentioned, these decisions are part of broader cost cutting drives by the two operators. So can you talk a bit about freighter replacement in the coming years, both at FedEx and UPS and more broadly among other operators, what's going to be coming next?

Jens Flottau:

Yeah, sure. I mean we need to put this a bit into perspective. It doesn't necessarily signal the idea of an upcoming market weakness in the broadest sense. It's a bit, I would say it signals caution and the cost cutting that two companies are aiming at. I was at the ISTAT conference, ISTAT Americas conference recently, and cargo was a pretty important topic there. And what became clear to me was that yes, the market, we're seeing a market correction right now from the historically higher levels that we've seen post Covid with all the unusual factors that we've discussed, to a more normal environment. Passenger belly cargo's coming back, yields are coming down, but they're still good even when they come down. So, it all has to be put into that kind of perspective.

And what people said there was that they're still really bullish in the air cargo market and the demand for freighters, both new build traders, converted traders and that mix will be needed to fill to meet the demand. I mean, you've seen a lot of conversion programs being launched recently and obviously there's been concern with the market slowing a bit that there's actually going to be too much capacity. Now at ISTAT, people said, "That's fine, we will use all of them."

As far as the new build market is concerned, yes, we've seen the launch of the 777-8F. Airbus has finally made its first step into the cargo or return, I should say, because they've had a freighter in the A330 freighter, but they're now building an A350 freighter. And there's talk about an A330neo freighter too. So, it seems we'll have a mixture of new builds, conversions and the market is ready for that. Also, looking at retirements, MD-11s are getting old, some 767s are getting old, the 747s are being retired. A lot going on.

Guy Norris:

And just to follow on to that, Jens, if I can just barge in for a second, I think when you were at ISTAT, you talked to, or you heard Tom Crabtree talk, he's a former Boeing Cargo guy and he's a sort of a veteran in the industry now. And he's now part of, he's an MD of Trade and Transport Group and their freight market outlook, it's interesting, they're putting out a short-term freight market outlook '23 to '27. And in that, even before they really had the intel on the UPS, FedEx move, they predicted that more than 200 freighters were at risk of near-term retirement just this year and next. So, they're sort of saying that that's really driven mostly by the imminent arrival of those more modern efficient freighters that you were talking about, Jens. So anyway, just interesting to note that the short-term move, and of course the MD-11 is the first victim of that.

Jens Flottau:

Yeah. And don't forget, I mean we don't have any new 747s anymore. The in-service fleet is getting old, at least the -400s. There's some really old 767s flying around. So, in the next few years, we'll see a huge change in the sector with old types leaving, new types coming in, conversion programs coming in. It'll be fascinating to watch all that, to be frank.

Helen Massy-Beresford:

I mean that's and we talked about the future, these MD 11s deliveries began in 1990, I think. So, the fact that the two largest operators are starting to retire their fleets, it's kind of the beginning of the end of an era, isn't it? I bet you both have some interesting memories and anecdotes to share about this aircraft.

Guy Norris:

Well, yeah, certainly. I know Jens does, I mean from my perspective, my introduction to the MD-11 happened in 1990 when you know, gosh talk about aging yourself, but I've got to admit that's when it happened. Of course, I was only a cub reporter, but yeah, I was sent on an early assignment. I was told, "Go to Gatwick. There's this new trijet called the MD-11. It's on around the world tour by McDonnell Douglas." It was before it was certified, so it was still an experimental category aircraft. And they'd basically set off from Dallas, they'd flown Dallas to Seoul, Seoul to Gatwick, London, Gatwick, and then it was going to be Gatwick to Hawaii. Very exciting for me. I'd never been to Hawaii before or anything like it.

So, I remember getting the train early from London, watching the sun come up, joining the MD 11 crew and then flying north. And part of the exercise was to go straight to the North Pole, do a complete simulated failure of the primary flight display system, which was pretty flashy at that time, flat screen TVs, LCD screens, which were new at that time to the industry. And just with the FAA on board in the cockpit to witness what happened when one second you're going due north, go over the North Pole and then literally the next second you're going due south because you've just passed over the top of the world and simultaneously failing the system just to see how it would cope. So, I watched the sun go down again as we headed to the North Pole, witnessed in complete darkness over the pole, all of the displays going haywire, but then quickly recovering. And it was at that point that they let me in on the disappointing news that there was a storm bearing down on Hawaii.

So, they took the decision to go, not to Hawaii, but to Yuma, Arizona, which was where their flight test center was instead. So, we then basically barreled south and established a speed record from the North Pole to Yuma arriving in Arizona 7 hours and 45 minutes later. And on the way down, from the cockpit, I spent the whole time in the flight deck with these beautiful big side windows, because it was basically the DC-10 cockpit, looking down. And we passed right over a B2 bomber, which of course was pretty new still in those days.

So, my first ever view of a B2 was looking down on one as it flew below us somewhere near Nevada. It was extraordinary. Yeah, and then we got to Yuma. The next day having recovered from this flight, we then said, "Oh, would you like to come to Long Beach with us? And by the way, we're going to do some stall testing on the way." So we headed out over to off the Pacific coast and spent an amazing hour stalling, and I was sitting there trying to eat my packed lunch, which probably wasn't a good idea. Stalling in a big wide body is quite an experience, I can tell you. So that was my introduction and then landing into California, first time I'd ever been to California and what a great experience. Yeah.

Jens Flottau:

I've got some great flights on the MD-11 too. Lufthansa Cargo used to have an around the world tour, it was a scheduled flight around the world from Frankfurt to  Dakar, Campinas in Brazil up to [inaudible 00:12:34] Quito, then across the Pacific through Asia, Dubai, back to [inaudible 00:12:39] actually, back to Europe. I did part of that. I didn't deal with the entire tour, but I did the Latin America part, which was fantastic. Flying obviously on the flight deck, which as Guy says is the best I've seen. It's spacious, great windows, pilots loved it. On the jump seat I loved it. We landed in Quito [inaudible 00:12:59], the high altitude airport, and I mean, speaking of high altitudes and performance, maybe Guy, you can talk about a little bit about the technical details of the aircraft. It was quite a tricky aircraft to fly, right? I mean, relatively small wing, relatively high speeds on approach, on takeoff. Pretty sensible to crosswind. It's been a very challenging aircraft for pilots to fly. I mean, many of them love the aircraft, but not an easy one.

Guy Norris:

No, you're absolutely right, Jens. I mean, of course they reduced the area of the span of the horizontal stabilizer as part of their drag reduction, weight reduction and improvement program for when they designed the MD-11. But I think that was part of the issue. It was a hot on approach, difficult to some pilots to land. Then Boeing, after the merger, did work with the original design team to improve the handling on approach and which they did. But of course there were accidents as we know nearly all of them, involving that kind of difficult landing phase. And we should mention originally McDonnell Douglas, this was their last throw of the dice for them in terms of their widebody family and building on the DC-10, it was part of the problem, as everybody knows now in retrospect, was McDonnell Douglas from its St. Louis headquarters after the merger, did not want to invest more money into the Douglas line. And so instead of all new airplanes, it was like derivative after derivative.

So, for the wide body line, the MD 11 was the last throw of the dice. The MD-12, as we know, never made it to launch. But in doing so, they really desperately needed the promise of those engine makers to deliver. And they were let down at the time by both Pratt and Whitney and GE badly. And they spent six years at least after their entry to service, trying to get back to what they originally promised. As a result of that, we know famously they lost some blue chip customers like Singapore Airlines.

I remember the morning of that phone call, and the result was Airbus and Boeing both cleaned up. Airbus really launched its A340 long range wide body program at the same time, Boeing, the 777. So, the MD-11 was effectively sort of sandwiched between them, and unfortunately because of its early performance issues never really recovered. So that's why only 200 were built instead of the 300 at least, which they hoped for. And I should say one last thing, McDonnell Douglas aircraft are well renowned for their structural strength over engineering in some ways. But that ironically is the reason why there are so many MD-11s flying today is because, boy, they make great freighters even if they were designed as airliners. And that's another why reason why they endure so long and why they're still here in the 2023 timeline.

Jens Flottau:

One last comment on the history here. I mean, the MD-11 also came at the back end of the four engine, tri-engine era, right? I mean, the 747, you could argue, had reached its peak by that time. People were looking, when the 767 existed already, the 777 came in '95 to United as a passenger aircraft. So, you can really say that though, the arrival of the 777 first killed the MD-11, and then later obviously the A340 as well.

So was a kind of combination of not enough money to invest in a proper completely newly designed aircraft and also just bad timing really. I mean, having a superior aircraft arrive a few years later really, really destroyed the market prospects combined with what you say, the shortcomings and performance and they weren't small, right? I mean, if I remember correctly, there was advertised at a 7,000 nautical mile range, and it came in initially at least at just over 6,000, 6,300-6,400, so that was a big difference. That could only be, I mean, there was a performance improvement program later, but that took, as you say, that took a number of years to resolve and then it was late.

Guy Norris:

Absolutely. And so I think the critical failure was the Singapore Airlines requirement to go from Singapore to Paris in the winter against winter winds, and it just couldn't do it at that time. I think it was initially a 7% shortfall on the Pratt Engine and 5% on GE. I might be slightly wrong with those numbers, but it's huge by today's standards, absolutely unbelievable. I mean, remember having moved to Southern California, I would spend, I'd be up and down the 405 freeway to listen to Douglas's latest PIP, product improvement plan, for that airplane as they desperately clawed back performance and it really wasn't the airframers fault. They really had to work on it, but eventually it all came good. Both GE and Pratt got their right engines, but of course, it was the market by then, it had gone. The A340 was taking some blue-chip customers and 777 was just coming down the track.

Helen Massy-Beresford:

It was great to hear some of your stories and memories of this aircraft. I mean, it was never bigger numbers, but certainly made its mark on the industry. That's all for today. Thanks both. And thanks to Guy Ferneyhough, our podcast editor, and please join us again next week for another episode of Check 6.