A hangar full of “ghost” jumbo jets shows Boeing is struggling to find buyers for its world famous but slow-selling 747. However, while the unsold aircraft will have rattled the US plane maker, it has a temporary, if risky, plan to save the hump-backed jet: buying its own planes and leasing them to cargo haulers. While the four-engine 747 is one of the best-selling jets in Boeing’s history, the latest version has struggled to gain sales as airlines shift to more-efficient twin-engine aircraft for long-range flying. The plane maker had a backlog of just 26 unfilled orders through the end of February, 19 of them freighter models, while its order tally for the year stands at two cancellations. There are also five “white tails”, or “ghosts” – the nickname for jets built without an airline buyer – taped up and sitting in storage. With the effective shutdown by Congress of the US Export-Import Bank – which traditionally has helped overseas carriers purchase planes – Boeing lost a key sales tool. Making matters worse, leasing companies have been hesitant to finance an ageing plane with a dwindling customer base. So Boeing is now renting out the huge, hump-backed 747s , which feature a nose that opens for freight, to cargo carriers in countries such as Russia and Azerbaijan, which increases the company’s exposure to potential defaults on payments. Through the end of last year, Boeing had provided financing valued at us$1.26 billion to 747 customers through Boeing Capital, regulatory filings show. That is about a fivefold increase from the close of 2012. In fact, 747-related loans and operating leases now account for about one-quarter of the portfolio managed by Boeing’s lending arm. As the air-cargo market recovers, the strategy may pay off for Boeing. The manufacturer recently landed a crucial 747 order from United Parcel Service that could serve as a bridge to the future for the wide-body plane. But tomorrow’s 747 – a symbol of luxury travel when it made its debut with Pan-American World Airways in 1970 – most likely will not be flying globe-trotting tourists. It will instead haul oversize cargo such as oil-drilling equipment as demand fades for bulky four-engine passenger carriers. “We believe in the long-term need for this aircraft,” said George Dimitroff, the head of valuations for Flight Ascend Consultancy. “As long as they don’t over-produce, which Boeing aren’t doing at the current rate, we believe there will be long-term demand.” The jumbo quickly become the world’s favourite big jet, a position cemented when it was chosen to carry the Space Shuttle on test flights in the US. The first flight took place in 1977, with a test version of the spaceship aboard. The last ferry flight took the shuttle <em>Endeavour</em> from Kennedy Space Center to Los Angeles in September 2012. But since then, the grandaddy of air frieghters has fallen on hard timesBoeing recorded more than $2.1bn in losses on the 747-8, the latest version, in 2015 and 2016 as it slowed production to keep pace with dwindling sales. The company received a big boost last year when UPS ordered 14 of the jumbo freighters and took options that would double the original order size. The sale was the largest Boeing has landed for the redesigned 747 since November 2007, according to the manufacturer’s website. It is unusual – and risky – for a plane maker to buy and lease its own product on a large scale. If the cargo carriers default or do not renew operating leases, it would be Boeing Capital’s responsibility to line up other customers, a challenge in a niche market. If the plane experiences a greater than expected decline in value, Boeing’s earnings or cash flow could be “materially adversely affected”, according to its filing. The Export-Import Bank has been dubbed the “Bank of Boeing” for the backing it has given to aircraft purchases by foreign carriers unable to tap conventional credit markets. But it has been blocked from providing loan guarantees of more than $10 million because it lacks a board member whose nomination has been stuck in a US senate committee since 2015. To market analysts such as George Hamlin, the UPS order is a sign of more deals to come, barring a global recession or other market turmoil. That deal alone could keep Boeing’s 747 in production for another four years. A generation of older air freighters will soon need to be retired and the Boeing jumbo has standout technology, from its fuel-efficient engines to its nasal ability to load oversize freight, said the Hamlin Transportation Consulting president. “UPS is a bellwether or bell cow, whatever term you want to use,” said Mr Hamlin, a former Airbus executive. “In the intervening time period with UPS bridging the gap, it’s possible other orders may appear.” Global air freight in January increased by 6.9 per cent from a year earlier, down from the 10 per cent growth in December but far outpacing the 3 per cent average annual pace recorded over the past five years, according to the International Air Transport Association, an aviation trade group. “The 747-8’s future is closely tied to the cargo market, and we’re keeping a close eye on that segment as it continues to show signs of improvement,” said Randy Tinseth, a Boeing vice president for marketing. <em>* </em><em>Bloomberg </em> <em>with The National</em> business@thenational.ae Follow The National's Business section on <a href="https://twitter.com/Ind_Insights">Twitter</a>