Widebody freighter fleet analysis – 2016

Today we begin our annual analysis of the worldwide widebody freighter fleet. We start with a look at the way the fleet has changed in recent years, and over the next few days will move on to look at individual freighter types in more detail, at carriers that either began or ceased operations in the last year, and also give our view of future fleet trends.

Change in widebody freighter fleet, March 2016 v2The air freight industry turnaround that began in mid-2013 after several years of mostly flat or declining demand took firm root in 2014, and gave us a year of modest (about 5%) growth. This was followed by another year of growth in 2015, although at an even more modest (about 2%) level. But one good year in 2010 and the two low-growth years in 2014 and 2015 have not been enough to raise the market all that far above its pre-recession peak in 2007. Through those years, passenger demand continued to grow strongly, and carriers worldwide responded by adding capacity – expanding their long-haul fleets with cargo-friendly 777s, and A330s, and more recently with 787s and A350s. Some of these have been used to replace older types, but for the most part the new aircraft were in addition to existing capacity. So it is hardly a surprise, given an eight-year period from 2008 through 2015 in which there has been little increase in demand for air freight but a massive increase in belly capacity, that carriers’ hunger for main-deck capacity has waned.

However, even though more capacity was the last thing they wanted, carriers had to take delivery of freighters ordered during the boom years prior to the recession, and then again in 2010 during the temporary spike in air freight demand. As these new freighters entered service, the only choice in an environment of flat or declining demand was to park older models, and two years ago, in early 2014, the number of widebody freighters in commercial service worldwide was almost the same as it had been in 2007. In that year, Cargo Facts put the global widebody freighter fleet at 945 units; at the beginning of 2014 we counted it at 958, an increase of just 1.4% in seven years.

In 2014, as air freight demand began growing again, carriers slowed the parking of older freighters, even as new capacity entered their fleets, and when we looked at the worldwide widebody freighter fleet in early 2015, it had increased to 978 units – a 2.1% increase over the previous year, but still up just 3.5% from 2007. In 2015, demand growth slowed to just 2%, but the cost of fuel fell dramatically, leading some operators to return a few formerly parked freighters to service.

As we look at the fleet today, we count 995 widebody freighters in commercial service worldwide, up 1.7% over the total a year ago, and now up 5.3% over 2007.

However, while the total number of freighters in the fleet has changed only slightly, the composition of the fleet changed much more dramatically, as new freighters continued to enter service and older types were retired. Over the last year, forty-one new production freighters were delivered: seven 747-8Fs, nineteen 777Fs, three A330-200Fs, and twelve 767-300Fs. This is similar to what we saw last year, but a new development in 2015 was a resurgence of interest in passenger-to-freighter conversion of widebody aircraft, specifically medium-widebodies, and the last year has seen the redelivery of eleven freighter-converted 767-300s and three A300-600s.

In addition – as was the case last year – a few parked freighters were brought out of storage and returned to service. With the price of fuel falling dramatically, carriers brought a net of eight previously parked freighters back into service, including one 747-400ERF, four 747-400Fs, and three 747-400BDSFs. This is a drop from the thirteen re-activitions the year before, and we do not expect that many more widebody freighters will come out of the desert in the future.

Of course there were retirements, too. Over the past year, a net of forty-six freighters of seven types left the fleet, including two 747-200Fs, eleven MD-11Fs, five DC/MD-10‑30Fs, ten DC/MD-10-10Fs, one 767-200F, one A300B4Fs, and sixteen A310-200Fs/-300Fs.

In all, additions outweighed retirements, and the commercial widebody fleet grew by 17 units.

Through the last few years of widebody freighter additions and retirements, one type has remained remarkably stable. The medium-widebody A300-600F has been a cornerstone of the express operators’ fleets almost since its introduction, and will likely remain so for several more years. There are currently 165 units in the fleet, the largest number – by a considerable margin – of any widebody type, and all but a handful are operated either by or for DHL, FedEx, and UPS. The A300-600 freighter fleet actually grew over the last twelve months as three passenger units were converted to freighter configuration.

The big three express operators (and TNT) aren’t just the biggest operators of A300-600Fs, but in fact account for over half of the entire widebody freighter fleet. An exact count is difficult, because DHL, in addition to the freighters operated by carriers it either owns or has a significant stake in, also uses lift contracted from independent carriers. Likewise, UPS uses Denmark-based Star Air to operate a fleet of eleven 767-200Fs on its behalf. Add in FedEx and the five widebodies operated by TNT, and it is clear that about 53% of the world’s widebody freighter fleet is operated by or for the big express companies (up from about 52% last year). This 53% is not spread evenly among the various types, however. The express companies account for about 35% of the large widebody freighters. This is a significant percentage, but pales when compared to the 74% of the medium-widebody fleet operated by or for DHL, FedEx, and UPS.

We will continue the widebody freighter fleet analysis tomorrow, with a look at carriers that have entered or exited the widebody arena over the last year.

You can read Part II here, and Part III here.

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