With 26% of narrowbody fleet parked, capacity stability on horizon

The narrowbody freighter market could stabilize by 2030 if Boeing and Airbus meet their delivery goals. In fact, a more balanced supply of narrowbody feedstock could return as soon as 2028 contingent upon Boeing and Airbus meeting expected delivery ramp-up goals for new-generation narrowbodies. This would free up current-generation A320ceo and 737NG aircraft whose leases were extended in 2022 and 2023, George Dimitroff, head of valuations at Cirium Ascend, said during an appraisal panel at the recent Cargo Facts EMEA 2025 in Istanbul. [caption id="attachment_57288959" align="aligncenter" width="1890"] Cargo Facts Consulting Director Guillermo Ochovo, far left, moderates a panel with, from left, George Dimitroff of Cirium Ascend; Alice Gondry of MUFG Bank; and Mark Halsor of Aviation Asset Management. (Photo/Cargo Facts)[/caption] “If the new production of A320neos and 737 MAXs is enough, that will then allow those airlines to finally let go of those passenger aircraft, and then the lessors will either be able to convert them themselves or sell the feedstock to anyone who wants to buy it,” he said. However, tariff uncertainty and supply chain disruptions could pose a challenge for the planemakers as they look to increase deliveries. Narrowbody freighters in storage Trade wars, the supply chain and labor issues could increase conversion and maintenance costs of all narrowbody freighter types and keep recent conversions inactive longer. “About 26% of the narrowbody freighter fleet is parked,” Dimitroff said. “Parked can mean anything, and it can mean all narrowbody aircraft types. So that could be a 727F, a 737 Classic, a 757F or a 737 NextGen as well, so don’t assume that it’s 26% of the newest generation. But it’s still a very high storage rate, and some of those parked aircraft may never return to service.” The saturated narrowbody market can be partly attributed to lessors in the passenger space converting feedstock to freighters as the pandemic demand for air cargo service declined, he said. More capacity The return of passenger service allowed lessors to remove engines with green time remaining from narrowbody freighters and place them on short-term leases with passenger airlines. “Some of the narrowbody freighters are without engines,” Dimitroff said. “I think there's an anecdote in the industry that they’re all without engines. That’s not true. There are a lot of them parked with engines.” The lease rate for a CFM56-7B averages $90,000 per engine, plus maintenance reserves, making it hard to place a 737-800 freighter on lease unless the lessee is willing to pay more than $180,000, he added. The transition to next-generation narrowbody freighters will accelerate when feedstock becomes less expensive, Dimitroff said. Lowering feedstock price “The reason we have high lease rates on these new-generation freighters is because the feedstock was expensive,” he said. “With the conversion, people spent over $20 million to get an on-ramp freighter and you have to fly that very intensely to justify that cost. “You need the feedstock to drop back down. Currently, the feedstock is around mid- to high teens at least, if not $20 million. We’ve seen a ten-year-old A321 trading for $30 million.” A321 freighter feedstock needs to be closer to $10 million to keep the conversion cost under $20 million, Dimitroff said. Many European carriers flying four hours a night will likely continue operating older freighter types because they cannot absorb the cost of a next-generation freighter, he added. See more coverage of Cargo Facts EMEA 2025 .

With 26% of narrowbody fleet parked, capacity stability on horizon

Cargo Facts EMEA 2025

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