Freighter Overcapacity Approaching Critical Levels - Global Air Cargo Sector Faces Tough Decisions

New Report Explores the Ramifications of Freighter Overcapacity

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Seattle, Washington (PRWEB) June 26, 2012

In an exclusive new research report, Air Cargo Management Group has determined that there is a growing threat of overcapacity of widebody freighter aircraft globally. ACMG, a consultancy to the air cargo sector since 1978, has determined that unless worldwide air freight demand resumes growth at near historic rates, the industry will face significant pressure to scale back fleet additions or to make substantial reductions in the fleet of existing freighters over the next five years.

“We’ve been concerned about the threat of overcapacity in the air cargo sector this year, so we set out to quantify the near-term balance between worldwide freighter capacity and air freight demand,” said Alan Hedge, Research Director of Air Cargo Management Group. “Our conclusion: the threat is significant and could become critical.”

With three new widebody freighters introduced in the last three years, freighter fleets of cargo carriers have been expanding. And the backlog of orders for new production freighters remains robust. Meanwhile, the production rate of widebody passenger aircraft is set to double, adding a significant amount of competing belly space for cargo.

To sustain the freighter order book and achieve a balance between air cargo demand and capacity, global trade will need to grow -- significantly. If it does not -- and there are substantial risks that it will not -- industry participants could be forced to:

  •     Reduce widebody freighter utilization, or accept lower load factors;
  •     Accelerate permanent retirements of existing freighters, including some popular, newer types;
  •     Reduce passenger-to-freighter conversions; and/or
  •     Scale-back freighter orders or defer deliveries.

Global air cargo demand has been stagnant since the post-recession rebound of 2010. Under such continuing adverse market conditions, ACMG anticipates that additional all-cargo airlines are likely to go bankrupt or be forced to restructure, while other combination airlines operating freighter aircraft may exit the main deck cargo business.

“A soft landing is possible, but that will require both aircraft buyers and manufacturers to act soon,” Hedge said.

Further conclusions from ACMG’s research appear in the new report “The Freighter Overcapacity Threat,” which is available for purchase at http://www.aircargocapacity.info. A teleconference highlighting ACMG research on the topic will take place on June 26 at 12 p.m. EDT (16:00 GMT). To RSVP for that teleconference, please visit http://www.cargofacts.net.

ABOUT AIR CARGO MANAGEMENT GROUP
Founded in 1978, ACMG is a specialized aviation consulting firm, which focuses on freighter aircraft and all aspects of the worldwide air freight and express industry. ACMG is owned by New York-based Royal Media Group, a leading information services media company.

To order or for more information about the new report, visit http://www.aircargocapacity.info or call 1-212-564-8972 ext 108.

Alan Hedge, an aviation analyst and the ACMG consultant who authored the report, is available to provide expert commentary to the media on the results of this report and on the air cargo industry in general.


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