Long-Term Market
Resilient demand for air cargo
While surface transport accounts for the majority of the world's freight traffic, air cargo remains indispensible for industries that transport perishables, such as seafood or flowers; high-value, low-weight goods, such as consumer electronics or pharmaceuticals; and time-critical goods such as just-in-time inventory items. Lately, with rising fuel prices, shippers have settled for slower modes of transport. But the speed advantage of air cargo ensures air freight's role in the global economy.
Air cargo can be carried in the lower hold of passenger flights or on dedicated freighters. Capacity on passenger flights has been expanding, especially as greater numbers of highly cargo-capable airplanes, such as the 777-300ER, enter the fleet. Lower-hold cargo can generate extra profit for passenger airlines, taking advantage of dense passenger networks. But freighters, with larger payloads and routes and frequencies optimized for cargo, carry the majority of traffic-about 60 percent.
Air cargo traffic growth, measured in revenue tonne-kilometers (RTK), is projected to average 5.2 percent over the next 20 years. Global economic growth and the need to replace aging airplanes will create a requirement for 2,760 freighter deliveries over the same period. About 1,820 of these will be passenger airplane conversions. The remaining 940 airplanes, valued at $250 billion, will be new. The freighter fleet will nearly double in size, from 1,740 airplanes in 2011 to 3,200 in 2031.
Most standard-body freighters to be conversions
Boeing forecasts a requirement for 1,120 standard-body freighters, nearly all of which will be passenger conversions. The low capital cost of converted airplanes makes them attractive for the low-demand routes typically flown in standard-body operations.
Express carriers drive medium widebody market
Of the 710 medium widebody freighters delivered during the forecast period, 260 will be new purpose-built freighters. This market segment is driven by express carriers, which value the balance between the lower cost per tonne achieved by larger airplanes and the schedule flexibility of smaller airplanes.
Intercontinental operations favor new, large freighters
Although purchase prices for converted large freighters are attractive, the performance and reliability advantages of new, purpose-built freighters outweigh this consideration--particularly for intercontinental cargo operations, where larger payloads and extended ranges are crucial. Of the 930 large freighter deliveries, 680 will be new airplanes.
