Burgeoning Freighter Demand Creates Aircraft Investment Opportunities

A healthy world economy is driving demand for cargo transport by air. Nearly 2,900 freighter aircraft will be added to the world fleet to meet that demand.

Economic projections indicate that the global economy, as measured by gross domestic product (GDP), will grow at an average 2.9% per year during the next 20 years. Demand for air cargo transport, measured in revenue tonne-kilometers (RTK), is strongly linked to GDP.

Based on three decades of Boeing economic analysis and modeling experience, the industry reference Boeing World Air Cargo Forecast projects that rising world GDP will drive an average 6.2% annual growth in demand for air cargo transport. At this average growth rate, air cargo transport demand will triple in 20 years.

While demand for air cargo transport will triple, the number of freighters in the world fleet will only double. Air cargo demand and the freighter fleet grow at different rates because some demand may be met by using larger freighters, rather than by increasing the number of airplanes. Some demand will also be absorbed by the passenger airplane fleet, whose revenue cargo capacity will also grow during the forecast period.

All factors considered, the world freighter fleet will take delivery of nearly 2,900 freighter aircraft. About 1,100 of these will replace freighters that will be retired during the forecast period, leaving a net fleet growth of 1,800 new and converted freighters.

Wide-Body Freighters Are the Market Growth Segment

The number of wide-body freighters will grow by a factor of 2.7 during the forecast period. At the same time, growth of the standard-body fleet will slow. Consequently, wide-body freighters, which currently make up 47% of the world fleet, will gain the majority share with 64% of the fleet. A relatively small number of very large freighters, which will enter the fleet during the next 20 years, will contribute little to the rise in average freighter size. The increased share of wide-body freighters of all sizes—new and converted—will drive average freighter size to increase 25% by 2024.

Global Network Carriers Will Favor New Freighters

For example, of the 1,093 standard-body freighters to be delivered, only about 27 will be new-production freighters. In contrast, of the 996 large freighters to be delivered, 519 will be new. The 724 new production freighters to be delivered in all categories represent a total value of $155 billion in current U.S. dollars.

Converted freighters are a good investment value because carriers use the relatively low-cost aircraft in a large number of air cargo operations where the additional time required for maintenance of older aircraft is not an issue.

The Boeing Converted Freighter program addresses the growing requirement for wide-body conversions, modifying 767-300 and 747-400 passenger airplanes to 767-300BCF and 747-400BCF freighters. Boeing Converted Freighters enjoy the benefits of original Boeing engineering, parts, documentation, and post-delivery support, greatly increasing their residual value and marketability.

Many operators, particularly global network carriers, find that new freighters provide crucial advantages, including greater payload or range capability, higher reliability, and greater fuel efficiency. Where yields are tight, the efficiency of wide-body freighters, such as the 777 Freighter and 747-8 Freighter can spell the difference between marginal and profitable operations.

For a detailed discussion of these topics, visit the Boeing World Air Cargo Forecast website: www.boeing.com/commercial/cargo/WACF_2004-2005.pdf