According to Boeing, 60% more cargo planes will be needed by 2041 to support air freight

MIAMI — Boeing on Wednesday refined last summer’s forecast that air freight demand will double over the next 20 years, leading to a 60 percent expansion of the global freighter fleet.

The biennial World Air Cargo Forecast remained essentially unchanged from the conclusions presented in Boeing’s Broader Commercial Market Outlook, but added some details.

The analysis projects air freight volume to grow at a compound annual rate of 4.1% through 2041, based on expected growth in global trade, industrial production and e-commerce.

That equates to nearly 2,800 production and converted cargo aircraft to meet expected volume, including 940 factory-built widebody models. About half of the new aircraft will replace older, less efficient aircraft, and the rest will support greater ship demand. A third of the deliveries will consist of factory-built cargo aircraft, while the remainder will consist of used passenger aircraft that have been converted to carry heavy containers in the main cabin.

The global fleet of standard, medium and large cargo aircraft will grow 2.7% per year over the next two decades, from 1,300 units to more than 3,600 jets, Boeing (NYSE: BA) said. The Asia Pacific region will receive 40% of all new freighters.

The number of aircraft required would be greater were it not for improvements in fuel efficiency and productivity, said Darren Hulst, vice president of commercial aircraft marketing, during a briefing for reporters at the International Air Cargo Association forum here.

“We are seeing more capable and productive aircraft. That will help meet fleet needs over the next 20 years,” he said.

A steady slump in air freight volumes since March after two years of exceptional pandemic-driven growth has not altered long-term growth forecasts, especially as several structural factors favor increased use of aircraft to transport goods.

The pandemic led to record growth in air freight volume and revenue. Airlines added equipment to take advantage of the market. (Source: Boeing, Cirium, FlightRadar 24)

Boeing’s cargo forecast expects global trade growth to continue at an annual rate of 2.8%. Other influences on freighter demand are:

  • The unstoppable growth of e-commerce and express networks to move packages.
  • New entrants such as passenger airlines (Air Canada, WestJet and Sun Country) and shipping companies (Maersk, CMA CGM and Mediterranean Shipping Co.) creating or expanding cargo airlines to diversify their logistics offerings with a faster service option.
  • E-commerce platforms like South America’s Mercado Libre and Alibaba’s logistics arm are creating private airlines and using airline partners like Brazil’s Gol to expedite B2C and B2B deliveries.
  • Better competitiveness against ocean shipping as container lines manage capacity in a more disciplined manner to maintain higher rates.

Hulst said Boeing has counted about 40 new freighters over the past two years. According to the report, 90% of air freight revenue for the entire industry is generated by airlines flying at least some dedicated freighters, ie airlines with combined passenger and freighter fleets or pure freight operators, which explains some of the renewed interest in freighter investments.

The report also highlighted other market shifts that may steer shipping needs toward air mode. Since 2018, U.S. domestic air tonnage has grown 23% while trucking has increased just 1%, which officials have described as a temporary phenomenon due to the e-commerce explosion, a shortage of truck drivers and supply chain disruptions during of the year declared pandemic.

And since 2019, the amount of industrial machinery shipped from the US to Chile has quadrupled to support lithium mining for electric batteries.

Many freighters age and need to be replaced. (Source: Boeing, Cirium)

Data from Boeing shows that more than half of the major freighter fleet is over 20 years old and will need to be replaced by more modern aircraft in the coming years. During the COVID crisis, many cargo planes that under normal circumstances would never have flown again were taken out of storage in response to a shortage of air transport caused by the decline in passenger flights. How long many of these aircraft can remain in service with the high cost of kerosene and lower rates remains to be seen.

“That means over 300 jets weighing 80 tons or more [in payload] must be replaced either now or by the end of this decade,” said Hulst.

Boeing will produce its last 747-8 in the first quarter of 2023. The 767 medium-widebody and large 777 Freighters will continue to be built through 2027, when international regulations for cleaner engine types come into effect. The manufacturer announced on Tuesday that Emirates has ordered five 777 cargo jets.

Hulst said freighters will carry more than 50% of the cargo compared to a more even split before the pandemic.

Boeing’s replacement for the 777 and 747 is the 777-8, which is scheduled to enter service in late 2027. Competitor Airbus recently introduced the A350 Freighter to compete against the 777-8. Flight news service Cirium counts 43 firm orders for the 777-8 from four customers, not including about 16 options. The A350 has 31 orders so far.

Boeing achieved a record in freighter sales — conversions and new — last year, and has sold nearly 80 production freighters through October 2022.

Hulst said there won’t be a major short-term impact on shippers who need to move oversized shipments, as more than 300 nose-loading 747 jumbo jets are still in service and many will continue flying into the 2050s. Only about 2% of shipments by tonnage require extra large freighters.

Airbus (DXE:AIR) issued a more conservative forecast for annual air cargo traffic of 3.2% last summer, with the express sector leading the way with growth of 4.9%.

Manufacturers use the forecasts to sell aircraft. Consulting firm McKinsey forecasts that freight demand will grow at 2.5% to 3% per year through 2031.

Click here to read more reports on FreightWaves/American Shipper by Eric Kulisch.

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