The widebody freighter fleet: Growing again, but slowly

Today we begin a multi-part analysis of the worldwide fleet of widebody jet freighters in commercial service, as of 31 January, 2018. We start with a look at the entire fleet – which carriers are operating which freighters – and in the coming days will move on to the ways in which the fleet has changed on a type-by-type and operator-by-operator basis.

Note: Needless to say, by the time you read this there will have been changes from what we show here – freighters parked or reactivated, as well as new deliveries and new orders (such as the UPS order for fourteen 747-8Fs and four 767-300Fs placed on 1 February) – but to make year-on-year comparisons meaningful, we use the end of January as our cutoff date.

Air freight demand grew steadily, if unspectacularly, in the five years from 2012 through 2016, increasing about 18.5% over the period – an average annual growth rate of 3.5%. This was well down from what would once have been considered normal, but was very much in line with what many in the industry had come to accept as the “new normal,” after a period of wild swings in demand in the period around the financial crash that began in 2007.

But despite this modest growth in demand, the number of widebody freighters in service declined 1.0% over the five-year period, as carriers and lessors parked older freighters at a faster rate than they took delivery of new ones.

2017 was different, at least on the demand side. The growth in air freight demand that began in late 2016 accelerated to the point that worldwide air cargo traffic in 2017 was up close to 10% over 2016.

So, if demand for air freight accelerated that strongly, should we expect similar growth in the widebody freighter fleet? Well, we might expect it, but, as shown in the chart below, we won’t find it.

Not shown in the chart are carriers that lease widebody freighters on an ACMI basis, but do not operate any on their own behalf. This includes carriers such as Astral Aviation, which ACMI-leases a 747-400F from Air Atlanta Icelandic. For carriers that both operate their own freighters, and also ACMI-lease additional lift, we show only the carrier’s own freighters. Saudia, for example, is shown with four 777Fs, but it also ACMI-leases six 747-400 freighters from Air Atlanta Icelandic and myCargo Airlines. Regarding aircraft operated on a CMI basis (Crew, Maintenance and Insurance), we show these in the fleet of the carrier that flies them. DHL Express, for example, has nine 767-200Fs, but these are operated by Atlas Air, and we show them in the Atlas fleet. Also not shown on the charts are the An-124s used in commercial charter service, all but one of which are in the fleets of Antonov Airlines and Volga-Dnepr Airlines.

As we look at the fleet at the end of January 2018, we count 1,035 widebody jet freighters in commercial service worldwide, up 3.2% over the total a year ago, and up just 2.1% over the previous high point at the end of 2011. In fact, the current total is up just 5% over 2007, when deliveries of aircraft ordered by carriers and lessors in the years before the recession had swelled the fleet, despite the fact most of them were neither needed nor wanted. But, after reaching a peak of 1,012 in 2011, the fleet shrank as deliveries slowed and carriers parked older freighters, and it is only now, six years on, that the number of widebody freighters in service has finally caught up.

But what about payload? The total number of freighters in the fleet may have been almost constant over the last six years, but there have been big changes in the number of each individual freighter type. For example, there are seven times as many 747-8Fs in the fleet now as there were six years ago, and 747-8s are big freighters. Likewise, the number of 777Fs in the fleet has swelled. So, is it possible that the 30% growth in cargo traffic since then has been accommodated by increased average freighter capacity?

Theoretically possible, perhaps, but a close examination reveals that the total available payload of the widebody freighter fleet has increased only 4.0% over the six years since the beginning of 2012. The retirement of 747-400 and 747 Classic freighters and MD-11Fs, has taken capacity out of the fleet almost as quickly as delivery of 767-300Fs, 777Fs, and 747- 8Fs has brought capacity in.

The narrowbody freighter fleet, on the other hand, has been expanding rapidly in recent years, so some of the increased cargo traffic is likely moving in 757-200Fs and 737-400Fs, but Cargo Facts believes that much of it is carried in the bellies of the endless stream of cargo-friendly A330s, 787s, A350s, and 777s delivered to carriers worldwide to meet growing passenger demand.

Looking ahead at the order backlog for A330, A350, A380, 787, 777, and 777X passenger aircraft, we see belly space equivalent to about 450 hundred-tonne freighters. Some of these passenger aircraft on order will replace existing aircraft, but there will definitely be plenty of new belly capacity available in the future, so the real question is: If the recent trend of strong, and growing, demand for air freight continues, will carriers try to meet it with new freighters, or through increased utilization of belly space in passenger aircraft?

On the evidence available to date, the answer seems to be an increased reliance on belly space. The backlog of new-build widebody freighters on order with Boeing and Airbus has fallen from 150 at this time last year, to just 122 today. And, for reference, we point out that the backlog was 179 five years ago and 290 ten years ago. We expect that if demand continues to grow, orders for freighters will increase, but the pain of overcapacity is still fresh in the memories of most in the air freight industry, and we don’t expect to see the kind of binge ordering that has occurred in the past following an uptick in demand.