News / Freighter market turbulence: narrowbody glut, widebody scarcity

A flurry of narrowbody conversions has tipped the industry into oversupply for regional capacity, while IBA has confirmed air cargo industry concerns that widebody capacity will be in short supply for at least five years. 

The past five full years – 2019 to 2024 – saw a record number of passenger-to-freighter conversions, driven by constrained belly capacity, ecommerce and high freight rates. Freight fleet growth was 33% in the period, with more than 100 aircraft a year converted, peaking in 2023 with 198 conversions – mainly driven by narrowbodies.  

“The narrowbody freighter segment is observing signs of oversupply as conversions have outpaced demand, while feedstock availability and certification delays have been core challenges on the widebody segment,” noted IBA in its Freighter Market Outlook 2025 to 2044. 

The freighter fleet last year comprised 54% widebodies, 37% narrowbodies, 8% turboprops and 1% regional; this will alter by 2044 to 56% widebodies and 34% narrowbodies, while regional jets are expected to grow to 3% of the market. 

“This perceived imbalance is expected to gradually correct over the period, with the share of narrowbody freighters declining and widebodies gaining momentum.” 

There has been much industry concern over the future availability of widebody freighters. Atlas Air – which operates some 85 widebodies on behalf of customers – has been particularly vocal in its concerns over growth. 

“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,” said Martin Drew, chief strategy and transformation officer, at the Caspian Air Cargo Summit last week. 

“If you look at things from a large widebody freighter perspective at the moment, there’s 633 in the world, about 130 of those are going to be due for retirement in the next three to five years. Obviously, we know we’ve got the ongoing potential delays, in terms of new equipment coming through, and delays with conversions. So that, for me, is one of the key concerns, going forward.” 

And the air cargo industry is expected to grow in demand terms: IBA suggests 1% to 2% annual short-term growth, and 2% to 3% CAGR to 2044. Ecommerce, meanwhile, despite its current challenges, is forecast to see 6% to 7% CAGR growth. And it continues to be a more important part of overall airline revenues than before Covid. 

“In 2024, cargo revenue had stabilised below the pandemic peak, but stayed well above 2019, averaging 14% of airline income, two points higher than before the crisis.”

IBA added that demand for long-haul would be driven by high-value cargo and express, as well as the transpacific; despite current concerns over near-shoring and tariffs.  

But there are challenges in widebody capacity. 

“OEM production remains below its 2019 peak,” said IBA. “With the ongoing delays in the A350-1000F and 777-8F programmes, IBA anticipates annual factory freighter deliveries will continue to fall short of this peak until the mid-2030s.” 

Up to 2044, IBA expects some 2,850 freighter deliveries and conversions, of which 1,850 will be replacement aircraft. 

By 2030, operators will still rely heavily on existing 777F and 767F fleets, plus limited A330 conversions. Relief will only come post-2030 when A350Fs, 777-8Fs, and possibly 787 P2Fs, enter the market at scale, said IBA. 

“The majority of supply is expected to be P2F conversions, supported by a sizeable pool of ageing passenger aircraft providing suitable feedstock. Over the next 20 years, IBA anticipates approximately 2,045 freighter conversions, compared with 905 factory-built freighter deliveries.”

Meanwhile the aircraft retirement rate is expected to rise. Between 2020 and 2024, some 54 freighters were retired each year, and this number is expected to rise to 61 annually between 2025 and 2029. 

“During this period of reduced conversion and delivery activity, the global freighter fleet will continue to age. Consequently, once conversion and delivery volumes begin to accelerate again, IBA expects annual freighter retirements to return to the hundreds by the mid-2030s.” 

To 2044, IBA projects 1,854 freighter retirements, of which 1,042 will be converted narrowbodies. 

“Operators can expect moderate yet steady revenue growth, underpinned by gradual upward pressure on freight rates in segments where capacity remains tight. Carriers with large, dedicated freighter fleets, or flexible belly hold capacity strategies, will be best positioned to capture these gains, while those relying heavily on passenger aircraft may face more limited upside.” 

Earlier this year, industry veteran Ram Menen told The Loadstar that the current production challenges had actually been helpful in a year of airfreight softness and uncertainty. 

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