Large Widebody Freighter ACMI Services
Large widebody ACMI traffic contracted by 12.3 percent in 2007 compared to 2005 as weaker carriers withdrew capacity or exited the business.
Aircraft, crew, maintenance, and insurance (ACMI) providers, sometimes called "wet lease providers," offer cargo operators the flexibility to obtain lift on a trial basis, access incremental capacity, and provide service in markets that are highly seasonal-all without having to invest in dedicated equipment. The most significant segment of the air cargo ACMI business is for large freighters, especially 747s, in long-haul markets. The ACMI business is highly sensitive to changes in the air cargo business. This reflects its highly competitive nature, particularly in the 747 Classic segment. Several providers, representing 12.8 percent of 2007 large freighter ACMI traffic, exited the business during 2007 and the first half of 2008.
ACMI large freighter traffic has grown unevenly over the years, although the average annual growth rate since 1992 has been 14.9 percent. After a strong recovery between 2003 and 2005, ACMI traffic slowed by 8.5 percent in 2006 and by a further 4.2 percent in 2007. Recent surging fuel prices have hurt the competitiveness of those ACMI providers operating older equipment. This fuel price surge bolsters the attractiveness of carriers operating newer equipment like the 747-400F.
These wet lease providers will clearly continue to fulfill an important role in the air cargo industry. Remaining operators will increasingly migrate away from first-generation widebody aircraft such as the 747-200 and DC-10-30 as the high operating costs of older aircraft outweigh the benefits of their low capital costs. Those ACMI providers with new technology freighters will be poised for strong growth. The lines between ACMI, charter, and scheduled services will continue to blur as operators adjust their business models to ensure profitability.