Industry facing high jet fuel prices, expensive engines, geopolitical volatility  

The airfreight industry walks a tightrope as it heads into this week’s Cargo Facts Symposium in Nashville, Tenn.

Promises of solid demand — and profits — have hit headwinds caused by rising jet fuel prices, increasingly expensive engines and escalating geopolitical volatility. 

Executives from the world’s leading cargo airlines, lessors, conversion houses and MROs will gather Oct. 21-23 at the symposium to discuss market’s challenges, and risks and rewards in the industry as the economics of adding and operating cargo capacity remain complex. 

“This is an unusual time. A lot of us have just never seen this up and down that we are experiencing now,” Gary Warner, president of Precision Aircraft Solutions & 321 Precision Conversions, told Cargo Facts. 

Warner joins Cargo Facts Symposium for the panel discussion “Type Talk A321s — The state of Airbus narrowbody freighters” on Oct. 23, at 10:45 a.m. (GMT -5). 

The year began strong for the sector, but global air traffic and capacity fell sharply in March after the outbreak of the Iran war, according to IATA and Cargo Facts Consulting data.   

The conflict forced operators to reroute aircraft as they sought to limit disruption to established air shipping lanes. Globally, air cargo traffic fell 4.8% year over year, with traffic in the region declining by 54.6%.  

Since March, global air cargo traffic and capacity have — for the most part — recovered, but will likely end the year flat or slightly below 2025 figures, experts say.  

However, an attack on Riyadh’s King Khalid International Airport (RUH) on Oct. 9 closed the facility, once again raising questions about safety in the region, a modern-day crossroads for international trade. 

Perhaps the greatest effect caused by war has been oil prices, which have risen to their highest levels since 2022, when Russia invaded Ukraine.  

Jet fuel prices are especially vulnerable because disruptions in the Strait of Hormuz have interrupted both crude and refined oil shipments since March.  Brent crude oil December futures cost $108.19 per barrel today, compared to about $63 per barrel one year ago. 

“My concern for a lot of these smaller operators is that you may have a thinner balance sheet going into the winter, which is the slower season, and we may see some challenges for these folks,” Vern Titcomb, senior vice president of capital markets at Crestone Air Partners, told Cargo Facts. 

“There might be parking of aircraft, potentially.” 

Titcomb will join Cargo Facts Symposium for the panel discussion “Type talk 737 – Aging Classics and NGs, and ever-changing global fleet dynamics” on Oct. 23, at 11:30 a.m. (GMT -5). 

Engine availability and potential feedstock bottlenecks also continue to be a major factor in the industry.  

The dearth of narrowbody engines is driving up lease rates and feedstock for aircraft conversions is also scarce as passenger airlines operate both legacy widebody and narrowbody fleets for longer than expected.  

Finally, lessors and operators must balance high conversion costs against an uncertain economic growth forecast for late 2026. Experts estimate a recovery in this feedstock in five to six years.  

“The replacement of the 737 Classic didn’t happen as many in the industry expected, basically because of the consequences of the 737-800 being very utilized by the passenger segment,” Mylene Scholnick, senior adviser at World Star Aviation, told Cargo Facts. 

Therefore, right now, “There’s not a lot of feedstock or the feedstock is expensive.” 

Scholnick will join Cargo Facts Symposium for the panel discussion “Type talk 737: Aging Classics and NGs, and ever-changing global fleet dynamics” on Oct. 23, at 11:30 a.m. (GMT -5). 

The sessions and presentations at Cargo Facts Symposium this week will cover topics including: 

• Rebalancing capacity in the global freighter market; 
• An update on the A350F order book and fleet evolution strategies; 
• Technical aspects of freighter conversion and fleet management; 
• Freighter values and lease-rate trends; and  
• Type talks on the Boeing 777 and 737 as well as the Airbus A321P2F fleets.

Stay up to date with the latest news coming from Cargo Facts Symposium.