The global express fleet — Part II

Last week, we began our three-part analysis of the worldwide express freighter fleet. Part I offers a look at the overall fleet of jet freighters used now by the integrated express operators, and how that fleet has changed over the years. Today, in Part II we examine the fleets of relative newcomers to the industry, such as Amazon, SF Express and YTO Cargo Airlines. Tomorrow, Part III concludes with a company-by-company overview of the three largest integrators, FedEx, UPS and DHL.

Examining major changes by company, the stand-out for the second year in a row is Amazon. The Prime Air network, made up of 767-200Fs and -300Fs operated on a CMI basis by Air Transport Services Group (ATSG) and Atlas Air Worldwide Holdings, has grown rapidly in the twenty-two months since the inaugural Prime Air flight, and is on track to operate forty freighters by the end of 2018, up from only twenty-four by the end of 2017’s first quarter.

The rapid growth has helped drive rumors that Amazon could develop its own-operated network in competition with the likes of major operators including FedEx and UPS, and the company is seemingly on its way – a 2016 contract with ATSG for twenty 767 freighters included a roughly 10% stake in ATSG. A similar deal with Atlas Air Worldwide Holdings was then announced just months later.

A February 2018 report from The Wall Street Journal also shed light on potential common carriage for the e-commerce giant’s own-operated network. In a pilot for the service dubbed “Shipping with Amazon,” or SWA, merchants selling goods on Amazon’s marketplace can have packages picked up from their warehouses and injected directly into Amazon’s delivery network. Amazon’s current express fleet still ranks well-below the massive freighter networks of FedEx and UPS, but given Prime Air’s rapid expansion in the past two years, it remains to be seen how large the network’s appetite for growth may be during the upcoming years.

Like Amazon, Hangzhou-based YTO Express was another rapidly-growing express carrier in 2017, but has since added fewer aircraft. From five 737-300 freighters by the second quarter of 2017, YTO has since added two more 737Fs, as well as two 757-200 freighters converted by Precision Aircraft Solutions. YTO plans to take delivery of three more Precision-converted 757-200s in 2018.

Currently, all of YTO’s freighters operate in scheduled service to nine cities in YTO’s domestic and international network. Last month, however, YTO Express subsidiary YTO Cargo Airlines opened a cargo sales office in downtown Shanghai. According to a source familiar with the plans, the cargo sales office will focus on marketing excess capacity on YTO’s scheduled flights, while also offering “charter and long-term ACMI solutions to external partners.”

Shenzhen-based SF Airlines, the air arm of SF Express, leads among China’s express operators in fleet growth for the year. The airline began operating eight additional freighters since the end of 2017’s first quarter – one 737-300F and seven 757-200Fs. Additionally, SF acquired two ex-Jade Cargo 747-400ERFs late in 2017 in an auction on Alibaba’s Taobao website, both of which are still stored at Shanghai Pudong (PVG).

SF Airlines is also on the hunt for additional 767Fs. One passenger aircraft has already been acquired and is currently stored at Goodyear, but a deal to convert the aircraft into freighter configuration has not yet been reached. Cargo Facts believes SF Airlines may consider a mix of new-build and freighter-converted 767Fs. Regardless, an order for more conversions is expected after the airline secures adequate feedstock.

China Postal Airlines added three 757-200Fs, in line with the growth Cargo Facts reported in 2017’s express fleet analysis. More interestingly, we also reported that China Postal had ordered ten 737-800BCF conversions from Boeing, at a time when that conversion program had yet to officially launch. As of this April, Boeing delivered the first 737-800BCF conversion to launch customer GE Capital Aviation Services (GECAS), to be operated by West Atlantic Group, and has at least forty-five firm orders of the conversions from customers including China Postal and YTO – so we can expect growth to continue with the -800BCF type for both operators.

Canada-based Purolator added one 757-200F to its dedicated contract freighter fleet, which is operated by Cargojet using a mix of 757-200Fs, 767-200Fs, and 767-300Fs. While Cargojet does not provide information on which of its freighters fly for which of its customers, Cargo Facts believes Cargojet operates fourteen freighters for Purolator.

Join us tomorrow for Part III, where we will turn to the largest integrators, FedEx, UPS, and DHL.