The distribution of widebody freighters

Last month, we presented a detailed multi-part analysis of the widebody freighter fleets of airlines worldwide. That analysis (available here) showed that, as of the end of January 2018, seventy-three airlines operated 1,035 widebody jet freighters in commercial service, with 122 more widebody production freighters on order. While the number of freighters increased slightly over the previous year, both the number of operators and the number of units on order have been steadily falling for several years.

Today we begin a two-part look at the way those 1,035 widebody freighters are operated and how the different types of widebody freighters are distributed within the fleet — by type, by manufacturer, by operator type, and by geographical region.

Air freight demand increased by 10% in 2017 – by far the best result in many years. However, with few good years since 2007, the air freight industry has gone through ten years with relatively little net growth. Not surprisingly, this situation has had a negative impact on the demand for freighters. So too has the rapidly increasing belly capacity offered by cargo-friendly widebody passenger aircraft like the A330, A350, 777, and 787, and, for much of the decade, so have rising fuel prices. At the end of 2007, the widebody freighter fleet stood at 1,005 units. Since that time, other than a brief spike when carriers returned many parked freighters to temporary service following a surge in air freight demand in 2010, the total gradually fell to 958 at the beginning of 2014. With 4.5% demand growth in 2014, followed by the modest 2.2% and 3.8% growth in 2015 and 2016, respectively, carriers adjusted the rate of retirement of older freighters to almost match the rate of delivery of new ones. And even the strong growth in 2017 did little to change this pattern. Since we looked at it at this time last year, the fleet it is up by just thirty-three units (3.3%), and still only 3.0% above its pre-recession high point of 1,005.

However, while the number of widebody freighters in the fleet rose slightly, the order backlog shrank. At the end of January last year, Airbus and Boeing had a combined 150 production freighters on firm order. Twelve months later, that number had shrunk to 122 – an 18.7% decrease – as deliveries continued apace, but orders dried up to a total of just ten.

Comparing the current fleet to the fleet at the end of January last year on a model-by-model basis shows modest increases for all three of Boeing’s current production freighter types: 767-300Fs up eight to 129 (a 6.6% increase), 777Fs up nine to 138 (7.7%) and 747-8Fs up seven to 76 (10.1%). However, Airbus’ single production freighter offering, the A330-200F did not fare so well, with a net reduction of four in-service units to just thirty-two (down 11.1%).

In addition to the net of twenty new production freighters, the resurgence in demand for medium widebody freighters that began two years ago continued in 2017, and brought twenty-six P-to-F conversions into the fleet, including sixteen 767-300BDSFs, seven 767-300BCFs, two A300-600Fs, and one A330-300P2F.

Of course, there were retirements, too. As might be expected, carriers continued to retire older types: 747 Classics (down nine), MD-11Fs (down two), DC/MD-10Fs (down one), 767-200Fs (down two), A310Fs (down two), and A300B4Fs (down one).

However, in contrast to 2016, when carriers parked a net of sixteen 747-400 freighters, 2017 saw only one unit parked (a 747-400ERF), while two (both -400Fs) were returned to service. Given the strong demand growth that began in September 2016 and continued through all of 2017, many in the industry expected to see 747-400 freighters flying out of the desert in large flocks, but it did not happen. Carriers seemed satisfied to keep a tight lid on capacity, and, while they held on to the 747s they already had, they did not reactivate parked units.

In all, the fifty-five additions and twenty-two retirements left the fleet up a total of thirty-three units over the twelve months through 31 January.

The number of narrowbody freighters in service worldwide, which had been contracting for several years, began to increase in 2013 and has continued to increase in the years since, but the majority of freighters now flying are still widebodies. Today 60% of the jet freighter fleet is comprised of widebody units, down slightly from last year, but up significantly from just a 50% widebody share as recently as 2005. With demand having slowed for widebodies in recent years, while increasing for narrowbodies, we expect a slow, but steady, continuing decrease in the percentage of widebodies in the coming years.

New-build widebody freighters will continue to enter the fleet over the next few years, but the current backlog of 122 orders is well down from the 203 units on order just five years ago. Cargo Facts does not see any major resurgence in demand for the large widebody types, so the growth of the fleet depends on the extent to which the express companies, and the various carriers that fly for them, expand their medium widebody fleets with new-build 767-300Fs and freighter-converted A330-300s and 767-300s in order to keep up with the explosion of e-commerce.

FedEx has ordered 112 767-300Fs from Boeing, but with more than sixty of those still to come, another big order seems unlikely. DHL, which operates fewer aircraft of its own than FedEx and UPS, has never shown much of an appetite for production freighters, and that seems unlikely to change. DHL has placed orders for eight freighter-converted A330-300s with EFW, and, barring some unexpected hitch in the development of the conversion program or the performance of the aircraft, will likely order more – but not on the scale of FedEx’s 767 order.

Which, among the big three, leaves UPS. In late 2016, UPS placed an order for fourteen 747-8Fs (and, just after the end-January cutoff date for this analysis, doubled that to twenty-eight). But with the end of production of the 747-8F now on the horizon, further orders for the type – whether from UPS or anyone else – appear unlikely. UPS’ medium widebody fleet includes fifty-nine 767-300Fs and fifty-two A300-600Fs, and, while these are all relatively young (average age about fourteen years), the company has ordered three 767-300BCF conversions and (after our cutoff) four new-build 767-300Fs. Cargo Facts has been told that UPS wanted to place a large order for production 767s in early 2017, but, like other potential customers, was turned away because Boeing’s 767 production capacity was fully taken up by FedEx and the US Air Force. And finally, UPS does have thirty-seven aging MD-11Fs which it may consider replacing in the coming years, so a 777F order would not be surprising, but so far we have heard no indication that it is imminent.

Regarding the other potential customers mentioned above, both Amazon and SF Express have been rumored to want new-build 767 freighters, but, like UPS, have been turned down. Cargo Facts believes SF may now have reached an agreement with Boeing for a five-aircraft order, but the status of negotiations between Boeing and Amazon – or whether there have even been any negotiations – is unknown. If Amazon expands its fleet to fill the space available at its newly announced hub at Cincinnati/Northern Kentucky Airport (CVG), demand for medium widebody freighters – production or conversion – could skyrocket. We expect that Amazon will expand its fleet. In fact it may have already done so, if hints that Atlas will soon be operating 747 freighters for Amazon on the trans-Pacific prove true. Over time, we expect that Amazon will add both narrowbody and widebody freighters, and we would be surprised if more 767s were not part of the expansion.

Those interested in learning more about the current makeup and future growth of the widebody freighter fleet should join us at Cargo Facts Asia 2018 in Shanghai, April 23-25, where the subject will be explored from many viewpoints.