News / Delayed arrival of freighters may prevent 'a bloodbath' in air cargo market

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Only a trickle of large widebody freighters will join the global fleet this year and, in the face of last year’s market growth, this would be a problem. But now it could save air carriers from slumping yields and becoming casualties.

The announcement from Airbus that the 350 freighter was now expected to enter the market some time in the second half of 2027 – a year behind schedule – was hardly a shock.

The chronic supply chain problems that have hobbled aircraft production have shown no signs of abating and are widely expected to continue to hamper the industry for years.

At the same time. the news was a reminder of how clogged the pipeline for large freighters has become.

In November, Boeing announced that the launch of its 777-8 freighter would be delayed until 2028 – again to nobody’s surprise. Like Airbus, Boeing has struggled to ramp up output, and its efforts are further slowed by the tight regulatory scrutiny caused by the poor safety record that came to light in the aftermath of the deadly crashes of two 737 Max aircraft.

Boeing received 35 orders for 777 freighters last year, but delivered only 13. Meanwhile, Airbus has garnered 63 orders for its 350F so far, which reflects the bullish mood in the industry as demand continued to soar last year, fuelled by rampant growth in e-commerce.

Some observers have pinned their hopes for additional widebody freighter capacity to the anticipated entry of converted B777s. However, all three conversion programmes have yet to obtain certification – well behind schedule. According to one source familiar with these programmes, all three are still months from obtaining their certificate.

For the coming months, production 777Fs will remain the sole source of additional large widebody freighter capacity, he said.

Technical issues allegedly hampering the road to certification aside, the US Federal Aviation Administration (FAA) is seen to be moving cautiously to avoid fresh accusations of negligence in its oversight of commercial aircraft developments. Moreover, the regulator has been in the crosshairs of the new Washington task force to cut government spending, which has terminated contracts of non-permanent FAA staff, largely those their probationary employment period.

And the incoming chiefs at the Department of Transportation have signalled a firm stance on oversight of aircraft development and production. Both Steve Bradbury, designated deputy secretary, and transportation secretary Sean Duffy have expressed an intention to be tough on Boeing.

At November’s TIACA conference, Darren Hulst, Boeing VP commercial marketing, warned that the industry might see a shortage of large widebody freighters in the second half of this year.

Tom Crabtree, MD of Transport Research Advisory, noted that capacity expansion had lagged airfreight demand throughout last year, which kept supply tight and drove up airfreight pricing. Above all, the relentless growth of ecommerce demand for lift pointed to further upward pressure.

However, the recent assault on ecommerce by the US government, with the withdrawal of de minimis exemption for ecommerce imports from China, has given operators pause for thought. In the three days before the measure was then postponed, to give US Customs time to develop systems to cope with a flood of shipments to clear, a significant number of ecommerce charters were cancelled, and the number of weekly freighter flights between China and the US was down 15% in late February month on month.

One forwarder reported that Temu had paused to re-evaluate a planned contract for a large volume of ecommerce that it had been on the verge of signing.

Regulatory moves on ecommerce in the US and the EU are not expected to stem the flow of ecommerce, but they should slow down airfreight flows. Some have argued that the extended transit time and higher processing costs plus tariffs would undermine the viability of using airfreight, and they predict a shift to ocean and fulfilment from warehouses close to markets.

Industry veteran Ram Menen is among others who foresee a continued role for international airfreight, and argues that ecommerce depends on speed. However, he predicts a temporary slowdown in airfreight volumes, adding that this will make a huge difference in regard to the capacity situation.

“The delays in new freighters joining the current marketplace are not going to be that much as there will be a slight initial slowdown in volumes that the existing capacity can easily deal with. This will also mean that the operators can hold on to the current higher rates allowing pure freighters to operate profitably while the market deals with the new realities,” he said.

“If all the ordered new and converted capacity were to hit the market on schedule, we would find a bloodbath in the market, with a lot of operators of older-generation freighters going out of business.

“Either way, there would have been capacity balancing out, which it is better to have, with all the players still in the business for the long-term good of the air cargo industry. That’s why I am not very concerned about the delays in newbuild capacity entering the market,” he concluded.