DEMANDING FREIGHTERS

Despite a wildly inconsistent air cargo market—characterized by negative global traffic growth in 2008, 2009 and 2011—forecasters are calling for significant demand for freighter aircraft over the next 20 years, asserting that replacements are needed for the aging, existing fleet of cargo aircraft and that growth is inevitable.

“There are roughly 1,700 freighters in the global fleet today and over the next 15-20 years two-thirds of the existing freighters are going to reach their retirement age,” Air Cargo Management Group (ACMG) managing director Robert Dahl said. “So you have a replacement market for about 1,200 freighters over the next 20 years, and then [determining how many more freighters are needed is] just a matter of how much growth you have.”

Boeing is projecting 5.6% average annual international air cargo traffic growth through 2030, but Dahl and others cautioned that the rate of growth could be as low as 2.5%-3% per year. “The number of freighters [needed] is much higher with the greater growth rate, but there will be demand for freighters even with a modest growth rate,” Dahl said.

Boeing is forecasting that the world’s freighter fleet will more than double to over 3,500 aircraft by 2030. It projects that over 20 years, 2,960 cargo aircraft will be added to the fleet. Of those, 1,240 will be converted narrowbodies with capacity of up to 45 metric tons. There will be 720 medium-size freighters added, of which 440 will be conversions and 280 will be factory built. In the large freighter category—widebodies carrying 80 metric tons or more—1,000 will be added including 310 conversions, according to the manufacturer.

ACMG mapped out scenarios for annual average cargo traffic growth rates of both 5% and 2.5%-3%. “With a 5% growth rate, we would need about 3,065 freighters over the 20 years,” Dahl said. “Roughly two-thirds would be conversions and the others would be production freighters. With 2.5%-3% growth, the fleet grows to just under 2,500 [in 2030]. The total number of freighters required would be about 2,250.”

The widebody freighter fleet has undergone serious changes in recent years. For starters, the 777 freighter entered service in 2009, the A330-200F in 2010 and the 747-8F, following multiple delays and launch customer Cargolux initially declining acceptance, finally entered service in the fourth quarter of last year. Also, the 2008-09 financial crisis drove carriers to park and ultimately retire many older 747 freighters. 

“The rise in fuel prices since 2004 coupled with the global economic crisis in 2008-09 caused a major transformation of the widebody fleet,” said Tom Crabtree, Boeing Commercial Airplanes regional marketing director and primary author of the manufacturer’s World Cargo Forecast. “The majority of 747 freighters in service as of 2006, about 177 aircraft, were Classics [mostly -200s] . . . About 65 Classics are now left in the fleet. The numbers have dropped dramatically. Those airplanes have been replaced by 747-400 production freighters and 777 freighters.”

Boeing has delivered 166 747-400Fs, 50 777Fs and six 747-8Fs. Crabtree said the newest freighter is performing well in service: “I can’t release any statistics, but I do know anecdotally it is doing quite well.” However, both Cargolux and Atlas Air Worldwide Holdings have indicated that the early build units fall short on some performance metrics.

Demand for smaller freighters, which will all be converted passenger aircraft, will likely be driven by expanding cargo markets in developing countries. “Demand for narrowbody freighters, in particular, needs to come from China and some other developing domestic markets,” Crabtree said. “The principal demand for narrowbody freighters in the past has been within express markets in the US and Europe. And those networks are migrating to larger planes and therefore there’s not really a replacement market where those [aircraft] had been used. So the demand in the future will have to come from these new markets: China, maybe Brazil.”

Dahl added, “The 757 and 737 Classic and MD-80, all of those were built in large numbers [and are prime freighter conversion targets]. In the broad context, feedstock really shouldn’t be an issue.”

Pemco World Air Services, which converts 737-300s/-400s and 757-200s, said conversion orders have remained steady. “We’re doing a lot of business in Asia,” said company president Kevin Casey. “There continues to be a rather rapid buildup of a middle class in China and of their demand for express items . . . In the past, narrowbody [freighter] demand in China was to build networks to feed long-haul cargo being exported to Europe and North America. We have that, but also now there is internal distribution of high-priced goods.”