Revisiting the 747-400 Freighter

By Alan Hedge

August 10th, 2018

In November 2017, air freight traffic was growing 8.0% year-over-year, jet fuel was selling for about $1.75/gallon, Cargolux CEO Richard Forson was telling journalists that he was thinking about expanding his fleet of 23 747 freighters, and Boeing’s production of new 747-8Fs had slowed to a crawl. From where were these additional freighters to come?

Fast forward nine months to today: according to IATA, air freight traffic in June 2018 grew 2.7% y-o-y, fuel is about 20% higher, at $2.10/gallon, and Cargolux still has 28 747 freighters (although the carrier has already secured at least one 747-400F set to come off-lease this year). There are eighty-two 747‑8Fs currently in service (including seven NCA aircraft in maintenance).

What about the 747-400/-400ER commercial freighter fleet? Below is the census of the active and stored fleet by age broken down by factory vs. converted freighters:

Adding the in-service 747-8F fleet to the 747-400 freighter fleet gives a global fleet of 276 aircraft (older model 747 freighters have been excluded).

Demand for 747-400 factory freighters remains strong, with less than 10% in storage, so it would not be inconceivable for some of the youngest units in the best condition to be picked up, as were the last three ex-Jade International units at the beginning of this year.

If some demand remains for factory freighters, might there be a possibility of trickle down to the parked converted freighters? The story here is gloomy. Over one-third of the converted fleet is in storage, and the age distribution of the stored converted units is skewed much older than the factory freighters (median age over ten years older). With the overhang of parked freighters, both factory and converted, it is no wonder that in 2017, only two conversions were performed, both the relatively easy upgrade of a 747-400 combi to full-freighter.

While the operating fleet of 747-400 freighters looks set to continue flying for a number of years, the in-service converted units, which do not have nose loading capability, and are much older than the factory freighters, appear exposed, especially if fuel prices increase significantly.

Those interested in learning more about the future outlook for widebody freighters are invited to join us 10-12 October at the Omni San Diego for Cargo Facts Symposium 2018. Industry experts from leading manufacturers, conversion houses and lessors will cover the topic at length during a roundtable panel discussion titled, “The Next Big Freighter?” For more information, or to register, visit Earlybird registration ends Friday, 24 August.