While air cargo demand factors will be hard to predict in “a year of uncertainty”, the outlook for capacity, exacerbated by an ageing fleet and slow deliveries, is depressingly clear, delegates at this week’s World Cargo Summit in Bruges heard.
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“Demand constantly outstripped supply growth month by month” in 2024, according to McKinsey data, and the lack of capacity available in the market it set to be one of the biggest threats to the industry’s growth in the coming years.
There is, already, a depleted fleet, and 31% of available freighters are “grandparents” at 30 years and older.
“Over many years we have seen an ageing of our freighters. But the last five years have been crazy and massive,” said partner at McKinsey & Co Ludwig Hausmann.
He added that by 2030, there would be an additional 17% of all freighters aged between 26 and 30 years old, meaning just under half the fleet will be in the range of retirement.
“Typically, you think about an airplane as a 30-year investment, and then at some point you retire the aircraft – it’s not fuel efficient, the maintenance costs explode,” Dr Hausmann explained.
And he added that deliveries of new freighters would not keep up with the pace of aircraft exiting the fleet.
“Best case, we will get 12% of new deliveries of freighters by 2030… There’s very little that makes me believe this number will be larger than that, there’s rather more risk of delays,” he said.
Indeed, Marco Bloemen, MD of data company Aevean, noted that the orderbook for new aircraft was not reflective of actual projected fleet growth.
“We are now at a stage where we are ordering all kinds of capacity, but there is not so much being delivered,” he said. “Future capacity will not be derived from what we are ordering, but from how much the manufacturers can deliver.”
Mr Bloeman explained that freighter orders were being overshadowed by those for narrowbody passenger aircraft – “that is really what’s making a lot of money right now for the OEMs”.
CCO of Air One Aviation Peter Scholten told the panel: “This year, we will have 11 747s ageing and we will be selling some 30% of them. We are adding two new 777s in the course of this year, which were supposed to join the fleet last year. That didn’t happen because of the delays at Boeing.”
Projecting what is to come, Dr Hausmann concluded: “I’m pretty confident that the freighter supply is remaining constrained for the industry.”
And one cargo airline executive told The Loadstar on the sidelines of the event that it was “simple economics”: costs will go up as long as demand continues to outstrip supply.
Indeed, director of product development for WorldACD Rogier Blocq said: “In 2021, there was a huge [rate] peak, of course capacity-related. And then, with more capacity, the rates came falling down in 2023, to 33% below 2022.
“And now you see it picking up again,” he said.
Written by: Charlotte Goldstone in Bruges, The Loadstar; CIFFA