The Air Cargo Paradox: Positive Demand Growth, But a Future 'Constrained' by a Freighter Shortage

The slow pace of new freighter additions to the market, combined with the need to retire older aircraft, could impact the air cargo industry's ability to grow in the coming years. This was the warning issued by a senior executive from cargo airline Atlas Air.

Speaking at the Caspian Air Cargo Summit, Martin Drew, Chief Strategy and Transformation Officer at Atlas Air Worldwide, highlighted the forecasts for continued demand growth in the coming years despite current geopolitical challenges.

A Positive Demand Outlook Despite Challenges

Drew said the air cargo industry and supply chains in general are now able to adapt quickly to unexpected events. He cited the example of e-commerce companies like Temu and Shein changing their strategies to cope with the U.S. termination of the de minimis policy. Meanwhile, broader supply chains are also reconfiguring in the face of numerous U.S. tariffs, with production shifting to Southeast Asia, while China focuses on markets like Europe, Mexico, and South America.

Overall, Drew said that demand is projected to grow by about 4% per year between now and 2030, driven by:

•    E-commerce demand growth: around 10%/year
•    International express: 3%/year
•    General cargo: 2.7%/year

The Supply-Side Challenge: The Growth "Bottleneck"

However, the air cargo market is facing a major challenge on the supply side. Drew emphasized that the global widebody freighter fleet is projected to grow by less than 1% per year until 2030.

The figures show that while around 35-45 new widebody aircraft are added each year, this will be largely offset by the retirement of older planes. Approximately 130 widebody freighters are expected to exit the market by 2030, led by aging MD-11F aircraft.

In total, the number of widebody freighters is expected to increase from 655 at the end of this year to only 685 by the end of 2030 – a net increase of just 4.4% over the next five years.

Meanwhile, aircraft production continues to face supply chain challenges, and passenger-to-freighter (P2F) conversion programs are also struggling to find suitable feedstock (older aircraft). Furthermore, some new, efficient passenger aircraft models like the A321X have very limited bellyhold cargo capacity.

“All this compounds an already tight supply environment,” said Drew. “Limited newbuilds, constrained conversion slots and the retirement of aircraft continue to widen that gap between supply and demand,” said Drew.

He concluded: “The supply side could become a constraining factor in terms of growth for the industry because we continue to see this imbalance in terms of supply versus demand.”

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Source: Phaata.com (According to Air Cargo News)

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