In September, maindeck freighter capacity expanded only nominally.

According to the Cargo Facts Freighter Capacity Index, which measures global maindeck freighter capacity,  last month’s index recorded only a one-point increase from August, signaling limited growth in freighter capacity despite strong demand for air cargo space. This constrained capacity environment, influenced by regulatory, production, and operational challenges, is expected to continue into the end of the decade.

Overall, the index’s September results highlight the persistent tightness in air cargo capacity.

The air cargo sector faces a pronounced shortage of widebody freighter capacity, intensified by production delays and limited feedstock for conversions. IATA data shows a 9.4% year-over-year rise in demand in September, while capacity grew only 6.4% compared to last year, largely from expanded belly cargo on passenger flights. This supply-demand imbalance is pushing up rates as e-commerce grows and ocean shipping remains constrained.

Much of the global widebody fleet is ageing, with many aircraft over 30 years old. As these older planes near retirement, the capacity gap is expected to widen. Despite strong conversion demand, fewer freighters have entered the market in 2024. Last year saw a peak of 258 deliveries, but only 150 are expected this year due to delays in production and restructuring at conversion facilities.

Much of the global widebody fleet is ageing, with many aircraft over 30 years old. As these older planes near retirement, the capacity gap is expected to widen. Despite strong conversion demand, fewer freighters have entered the market in 2024. Last year saw a peak of 258 deliveries, but only 150 are expected this year due to delays in production and restructuring at conversion facilities.

Furthermore, freighter retirements are accelerating due to regulatory pressures and rising maintenance costs. After a low in 2022, retirements surged in 2023, with projections suggesting over 40 retirements in 2024. This trend is largely driven by phasing out older models like the MD-11 as operators find it harder to justify the costs of maintaining ageing aircraft. As these retirements reduce available freighters, the industry’s ability to meet demand will be further constrained.

Conversion programmes face bottlenecks and rising costs, complicating fleet expansion efforts, while limited feedstock and high conversion costs restrict growth. While new options like the A330-300BDSF provide some relief, feedstock shortages and high expenses remain significant barriers. Operators have relied on converting 767 models due to their reliability and lower cost, but Boeing’s plan to end 767-300F production by 2027 limits this solution.

In the narrowbody segment, engine leasing has become highly competitive, with demand driven by limited supply and increased passenger service. Narrowbody engine values have surged by up to 20% annually due to production delays, limiting engine availability for freighters. Operators are delaying retirements of older 737 Classic freighters to avoid high replacement costs, leading lessors to profit from short-term engine leases. However, this engine shortage is expected to keep lease rates elevated, adding further pressure on narrowbody freighter operators.

In the narrowbody segment, engine leasing has become highly competitive, with demand driven by limited supply and increased passenger service. Narrowbody engine values have surged by up to 20% annually due to production delays, limiting engine availability for freighters. Operators are delaying retirements of older 737 Classic freighters to avoid high replacement costs, leading lessors to profit from short-term engine leases. However, this engine shortage is expected to keep lease rates elevated, adding further pressure on narrowbody freighter operators.

In conclusion, the freighter capacity shortage is unlikely to ease soon. Regulatory pressures, high conversion and leasing costs, and the retirement of older aircraft are expected to keep capacity constrained. ICAO’s 2028 emissions deadline also presents a significant challenge as compliance could require flexibility to avoid further strain. As a result, air cargo rates will likely remain high, impacting cost-sensitive shippers. The Cargo Facts Freighter Capacity Index reflects this tension, highlighting how market constraints limit freighter availability. Without substantial expansion or regulatory accommodations, the industry will continue to face pricing, availability, and growth challenges well into the future.

About Cargo Facts Consulting

Founded in 1978, Cargo Facts Consulting (www.cargofactsconsulting.com) is a leading air cargo consultancy and data provider. Through our specialised services in digital innovation, strategic planning, and growth management and data solutions, Cargo Facts Consulting helps its clients navigate the complexities of the air logistics industry.