Speaking at this week’s IATA World Cargo Symposium in Los Angeles, FedEx founder, Chairman and CEO Fred Smith emphasized the importance in today’s difficult air freight market of operating the most efficient freighters available. As an example, he pointed out that a 777 Freighter flight from Hong Kong to Anchorage cost at least $30,000 less than operating a 747-400F on the same route, with very little sacrifice in payload.
Which is why, he said, forty-nine 747-400Fs are parked, with six of them already scheduled to be scrapped. He added that the same applied to the MD-11F, of which twenty-four were in storage with four destined to be scrapped [Cargo Facts believes that the number of MD-11s parked and headed for scrap is actually higher than this].
One operator of more than a dozen widebody freighters interviewed by Cargo Facts at the event went even further, saying there is simply no price at which a 747-400F currently makes financial sense for his carrier. This sentiment was buttressed by a WCS attendee from a major industry supplier who told us that a 10% efficiency improvement was all that was required for his customers to replace existing freighters – regardless of their age or condition.
Turning to the current main-deck overcapacity situation, Fred Smith told attendees at the WCS that annual “5% to 6% underbelly capacity growth driven by increasing global passenger demand” means “further [main-deck] capacity reduction will be required,” in order “to staunch yield declines for commodity air freight.” He did not say whether this would impact FedEx’s freighter fleet, used to serve the express sector, which “continues to grow.” However, he did indicate that FedEx often uses belly space from “partner carriers” to move its more price-sensitive Economy Express shipments.
So, given all of the above, is the bell tolling the death knell of the 747-400 Freighter? Will more be parked? How soon? Or, will some of those 747-400 freighters now in the desert return to service as overall air freight demand picks up?
If you’d like answers to these questions, join us at Cargo Facts Asia in Hong Kong, 1 – 2 April, where the closing session will be the official release of ACMG’s 2014 Twenty Year Freighter Forecast. ACMG’s forecast is the industry’s only truly independent assessment of long-term global supply and demand for freighter aircraft. It covers the full market spectrum of jet freighters from small narrowbodies to the largest capacity widebodies. Cargo Facts Asia is the first forum at which ACMG will be sharing the details of its new 2013-2032 freighter forecast.
For more information or to register for Cargo Facts Asia, click here.
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