Asian freighter fleet analysis part I: Fleet renewals underway at EVA and Air Hong Kong

Today we begin our two-part analysis of the freighter fleet in service with carriers based in China, Hong Kong and Taiwan. We start with a look at carriers based in Hong Kong and Taiwan. Next week, we’ll continue with an analysis of the freighter fleet based in mainland China.

Late last year, three ex-Jade 747-400ERFs were put up for auction on Alibaba’s online shopping platform, Taobao. Following an intense bidding war, two of the jets were snapped up by Shenzhen-based express courier, SF Express. Like a metaphor representing the retail revolution in which brick-and-mortar retail sales increasingly migrate online, the two aircraft, which previously failed to find relevance in the general cargo market, will soon take to the skies again – this time, serving the faster-growing express segment of the air cargo market.

Not only were these the first known 747-400Fs to be sold in an online auction, the aircraft are also the first large widebody freighters to be acquired by an express carrier in China. At present, the largest aircraft SF Express operates is a 767-300BCF. Fittingly, SF’s voracious appetite for larger, longer-range freighters indicates broader trends that have developed in the year since we last analyzed the freighter fleet in service with (or in operation for) carriers based in China, Hong Kong, and Taiwan.

Accordingly, the larger combination carriers in the region, with capacity available both in the belly holds of their passenger aircraft and on dedicated freighters, have seen less of a need to add freighters – most of which carry non-express cargo. Nearly all of the growth in the freighter fleet was derived from express carriers.

As can be seen from the chart at right, as of September 2018, there were 217 freighters in operation with nineteen express and all-cargo carriers based in China, Hong Kong, and Taiwan (including three 747-400Fs and four 757-200PCFs operated on an ACMI basis). This figure is up 3.3% from September 2017, when freighter fleets operated by carriers in the region totaled 210 aircraft.

We’ll return to the high-growth express fleet based in mainland China next week, but first, a look at the freighter fleets based in Taiwan and Hong Kong:

A legacy of freighters among combination carriers

Starting with carriers based in Taiwan, despite the ongoing fleet renewal process underway at EVA Airways, the absolute number of freighters in operation remains unchanged compared to last year. EVA Air retired three 747-400Fs as the carrier has taken delivery of the first three of five 777Fs. EVA continues to operate two 747-400BCFs alongside the trio of 777Fs and expects to retire the freighter-converted widebodies next year, as the remaining two 777Fs EVA has on order with Boeing are delivered. However, unlike EVA’s recently-retired 747 production freighters that were acquired by Atlas Air Worldwide Holdings, Inc., it remains to be seen if the conversions will see life after retirement. Taiwan’s other major freighter operator, China Airlines, meanwhile, continued to operate a sizable fleet consisting of eighteen 747-400Fs.

Turning now to carriers based in Hong Kong, although some carriers took notable steps towards modernizing their fleets over the past calendar year, the number of freighters in operation with carriers based in the autonomous territory remains unchanged. Although Cathay Pacific retired two 747-400Fs, one unit was replaced by a second 747-8F that is operated on an ACMI-basis by Atlas Air. Air Hong Kong (a JV between DHL and Cathay Pacific) parked its second-to-last remaining 747-400BCF and added two recently redelivered, EFW-converted A330-300Fs, which are operated by ASL Airlines.

HNA-affiliated Hong Kong Air Cargo, the cargo arm of Hong Kong Airlines, continues to operate five A330-200Fs alongside a 747-400F on ACMI lease from Atlas. The carrier was expected to add two additional 747-400Fs in 2018 as part of an August 2017 agreement with Atlas, but to date has not done so.

Next week, in part two, we’ll continue this analysis with a look at the rapidly-growing express fleets of carriers based in mainland China.