Out with the old? Not so fast… Part II

Yesterday we looked at the history of orders and deliveries of the four available production freighter types, and the current state of Airbus’ and Boeing’s freighter backlogs. You can read that analysis here, but today we look at how these developments, combined with low oil prices and the modest growth in air freight demand seen in 2014 and 2015, have affected the pre-existing large widebody freighter fleet.

It was not that long ago that 747-400 and MD-11 freighters totally dominated that fleet. As newer 777Fs and 747-8Fs began entering service, there was an expectation that the older types would gradually be retired. Then, with the dramatic fall-off in demand growth following the Great Recession, that expectation changed from “gradually” to “very quickly.”
When we looked at this subject in mid-2014, we found that the pace of retirement of MD-11Fs and 747-400Fs had indeed begun to accelerate, with about 18% of MD-11Fs and 22% of 747-400Fs in long-term storage. But when we included planned retirements in the equation, it seemed clear that the numbers of these two types in service would soon shrink much more dramatically.

Since that time, deliveries of new production freighters have continued apace, but falling fuel prices and the return of demand growth led to the questions of whether retirements would slow or even stop, and whether carriers would begin return previously parked freighters to service.

In the eighteen months since then, what we find is that there are now 202 747-400 freighters in active service, thirteen more than the 189 in mid-2014. However, the in-service MD-11F fleet stands at 125, down twenty-two from mid-2014, for a nine-unit net reduction in the combined fleets.

The 747-400 freighter fleet is made up of two production and two conversion variants, and, as shown in the chart at right, they have not all fared equally. Only a relatively small percentage of the -400F and -400ERF production freighters are currently parked, but almost 14% of the -400BDSFs and 56% of the -400BCFs are now either parked, or in long-term desert storage.

With air freight demand forecast to grow only modestly in 2016, and with deliveries of new-build freighters likely to accelerate, it seems unlikely that there will be many more currently parked 747-400 freighters returning to service, or that the retirement of MD-11Fs will slow. Looking ahead, and taking into account announcements by carriers of planned retirements, we expect that within a few years, almost 45% of MD-11Fs, and 36% of 747-400Fs will have left the fleet.