LONDON — Volga-Dnepr Group announced Tuesday at the Farnborough Airshow that it had finalized terms for its order of 20 Boeing 747-8 Freighters, also agreeing to a long term deal for the group to provide logistics support for Boeing Commercial Airplanes.

Volga-Dnepr’s cargo airline subsidiaries Volga-Dnepr Airlines and AirBridgeCargo Airlines have already taken delivery of four out of the 20 ordered airplanes and operate a further four 747-8Fs from a previous order. Deliveries will be spread over the next six years.

Volga-Dnepr gets a necessary deal done despite geopolitical overhang

The cargo airline group, headquartered in Ulyanovsk, Russia, is a market “leader in the unique, oversize and heavy cargo” space. This makes large wide body freighters like the 747 and Antonov An-124 an operational necessity, and accordingly the 747-8F is a strong fit for Volga-Dnepr’s fleet.

The Group has 41 dedicated freighter aircraft in its fleet including 17 (12 Antonov An-124s [3 on order], and 5 Ilyushin IL-76TD-90VD) with the parent Volga-Dnepr Airlines, which has hubs at secondary Russian airports like Krasnoyarsk along with its main base in Ulyanovsk operating on a charter model.

AirBridgeCargo is the primary scheduled cargo carrier in the group, with hubs at Sheremetyevo and Domodedovo in Moscow and a worldwide long haul network with service to the United States, Asia, and Europe. AirBridgeCargo’s fleet includes 18 aircraft (8 747-8Fs, 9 Boeing 747-400 freighters, and one Boeing 737-400SF).

The group also includes ATRAN Airlines, a subsidiary based at Moscow Vunkovo and Sheremetyevo that operates scheduled flights with three aged Antonov An-12 turboprops and 2 Boeing 737-400SFs. And it recently opened CargoLogicAir, a subsidiary based at London Stansted and offering a mix of scheduled and charter service since January 2016 with one Boeing 747-400F and a 747-8F due before the end of this month.

As a Russian carrier primarily transacting in cargo involved with Russian industrial projects, Volga-Dnepr is more sensitive than most to the current geopolitical woes that have depressed international passenger and cargo volumes from Russia over the past two years.

The group specializes in carrying heavy cargo, which naturally includes machinery and other supplies for the oil industry, and accordingly has suffered in the wake of depressed oil prices worldwide. But in spite of potential concerns tied to the economic sanctions that have roiled Russian purchases of foreign products, Volga-Dnepr and Boeing got a deal done.

Volga-Dnepr doesn’t fix Boeing’s 747-8 production gap(s)

The headlines after the Volga-Dnepr order was announced last year, frequently proclaimed that the order “saved” the 747-8 production line. With 16 outstanding orders, and a current production rate of 0.5 aircraft per month or six aircraft per year, the Volga-Dnepr order theoretically fills 2.7 years worth of production for the 747-8.

However, with the order spread over 6 years, in practice the Volga-Dnepr order will fill less than half of each year’s production (2.7 aircraft per year).

Boeing has won 136 orders for the 747-8i and 747-8F (51 for the 747-8i and 85 for the 747-8F) and delivered 103 aircraft to date. The backlog includes 33 aircraft (4 from Transaero that are offset by 4 new potential orders from Iran Air for 33 net), but those deliveries are split over the next eight years.

This leaves Boeing with production gaps to fill in several years including 2017 and 2018. Volga-Dnepr’s deliveries, we understand, don’t fill out even those two years.

The broad takeaway is that this doesn’t “save” the 747-8 from its production gaps, and Boeing will still need to find orders from existing or new customers. One can imagine that certain carriers, for example Air China, would top up existing passenger fleets with air travel volumes exploding.

Conversely with the global cargo market in the doldrums, finding additional freighter orders will be difficult. The air cargo market is suffering from a megatrend towards smaller cargo that can fit in the belly of passenger aircraft, and that may depress even the future market for dedicated freighter aircraft.