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Boeing 767 Removed From Life Support

Stocks in this article: BA FDX UPS

EVERETT, Wash. TheStreet) -- Boeing's (BA - Get Report) venerable 767, nearly left for dead, has a new lease on life.

First, the resurgence of the Air Force aerial refueling tanker program in February meant 179 more aircraft for the 767 line. Then last week, FedEx (FDX - Get Report) ordered 27 new 767s for use in domestic cargo transport.

Orders from Federal Express and the U.S. Air Force have revived Boeing's venerable trans-Atlantic 767 airplane.

"The 767 has been a great airplane that led the way for twin-engine overseas operations," says aviation consultant Scott Hamilton, who follows Airbus and Boeing as managing director of Leeham. The aircraft was, however, overtaken by the 777 and the Airbus A330 and, more recently, by the Boeing 787.

"The 767 has been on life support for several years now, carried forward by freight orders and a few passenger orders," Hamiltion says. "Now the lifeblood of the program is the tanker, and they are getting some cargo opportunities."

The 767 entered service in 1982 and made history because "up to that point, with the exception of a few charter carriers, all airlines used three- and four-engine airplanes" for trans-ocean flights, Hamilton says. Subsequently, aircraft makers developed additional twin-engine aircraft including the 777 and A330. The 767 remains the preferred trans-Atlantic airplane, flying the route more frequently than any other aircraft, Boeing maintains.

In 2011, Boeing delivered 19 of the 767s, including five each to UPS (UPS - Get Report), ANA and JAL, and recorded firm orders for 40, including 27 from FedEx and five from the Air Force. Only 10 of the 767s were ordered in 2009 and last year combined, while 24 were ordered in 2008. In 2007, UPS ordered 27 of the 767s and other customers ordered nine.

The 767 provides "a good answer to our fleet management needs because it provides great flexibility, fast time in transit and sound cost performance," said Bob Lekites, UPS vice president for airline and international operations, in a statement in 2007.

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