Belly hold will not overtake freighters by 2037

Boeing’s new World Air Cargo Forecast 2018 (WACF), released yesterday at TIACA’s Air Cargo Forum, predicts the global fleet of freighters will grow by 70% from the current total of 1,870 units to 3,260 units by 2037 as freighters are expected to continue carrying the majority of air freight. Acknowledging that capacity in the bellies of passenger aircraft will increase, Boeing believes that “Dedicated freighters, which provide unique capability that passenger belly-cargo cannot match, will continue to carry more than 50% of the world’s air cargo demand.”

Speakers at Cargo Facts Symposium last week in San Diego concurred that they do not see the ratio shifting in favor of belly-hold capacity. Michael Steen, EVP & CCO, Atlas Air Worldwide, said, “The mix between freighters and bellies has been about 50/50 for the last few decades, and that hasn’t changed much, but of course it differs by trade lanes. The majority of express is freighters, same for dedicated e-commerce network. So you’ll certainly still see demand for freighters going forward.”

Olga Razzhivina, Partner, Oriel, added that from an aircraft design perspective, future aircraft will be less accommodating to cargo: “Aircraft are designed for passenger comfort.” As such, “new aircraft won’t offer as much belly space like the 777.”

Returning to WACF’s projected growth of the global freighter fleet, the increase is in response to projected growth in air cargo demand of 4.2% per year over the next twenty years – a figure that remains unchanged from Boeing’s 2016 WACF. Unlike in years past, however, where growth in world merchandise was the primary driver for freighter demand, this year Boeing cited the growing express market in Mainland China, and the rise of e-commerce – which is expected to grow by 20% annually through 2021 – as key drivers.

The accompanying chart provides a summary of the make-up of the baseline freighter fleet and the projected fleet in 2037 for both production and converted freighters. Boeing divides the fleet into three categories by size: standard-body (<45 tonnes), medium widebody (40-80 tonnes), and large widebody (>80 tonnes). Boeing foresees 2,650 freighter deliveries over the next twenty years, about half of which will replace retiring airplanes. More than 63% of the deliveries will be freighter conversions, while an estimated 980 production freighters will be delivered – 50% of which will be in the large widebody category.

The large production freighters’ share of the freighter fleet is expected to decrease from 29% today to 25% by 2037, while the medium widebody’s share increases from 33% to 35%. At the small end of the size spectrum, Boeing foresees the standard-body conversion share of the fleet increasing to 39% from 37% today to meet growing demand for regional express services in fast-developing economies. 

All-cargo and combination carriers are expected to take the majority of large freighters (66%, some 514 units), while express carrier networks will take the majority of medium widebody production freighters (66%, 468 units). Standard-body freighters will be added by a wider variety of carriers with 46% of deliveries going to all-cargo and combination carriers, 28% to express carriers, and the remainder to miscellaneous airline groups.

Not surprisingly, Boeing predicts that air cargo markets linked to Asia, and China, in particular, will lead all other markets in average air cargo growth over the next two decades. According to Boeing’s assessment, “The share of world air cargo traffic associated with East Asia, including the domestic markets of China and Japan and all international markets connected to East Asia, will increase from 52.5% in 2017 to 60% in 2037.”

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