Freighter Conversion White Paper, August 2017

The latest version has now been issued: Freighter Conversion Whitepaper, May 2018

With a surge in global freight volumes in the first half of 2017 and the industry experiencing its fastest pace of growth since 2010, the market is preparing accordingly for this surge in demand. IBA’s white paper examines the market demand, options and the economics for mid-life aircraft, feedstock and the conversion suppliers in the market.

Boeing and Airbus forecast robust freighter fleet additions for both growth and replacement in the next 20
years. Boeing forecasts, in their Current Market Outlook 2017-2036, that the freighter market will require 2,480
additional freighters (1,560 conversions and 920 new) with Airbus predicting in their Global Market Forecast
2017-2036 that an additional 1,950 freighters (1,218 conversions and 732 new) will be needed.

According to IATA’s latest June Freight Analysis report, global freight volumes rose by nearly 11% year-on-year
in the first half – this is the fastest pace of growth since October 2010. These results are further endorsed by
IBA.iQ, our insight and analysis database that supports aviation investment.

There is an interdependence between the demand for air-cargo and economic growth. Before the onset of the 2008 global financial crisis, demand for air-cargo was strong but like many markets this shifted as global economies slowed in the years following, and demand flattened. In 2017, once more, the global economy and improved industrial production is driving demand for air-cargo and the extraordinary growth in e-commerce,
and the demand for express delivery services is driving bullish growth forecasts for air freight from the OEMs. It is not just industries which rely on the movement of time-sensitive and high-value goods such as consumer electronics and perishables that want air-freight; rapidly growing e-commerce, changes in consumer expectations for fulfilment, and express delivery services are driving the growth in demand for air-freight. E-commerce items reportedly make up 20% of global air cargo volume.

Click on the link below to read the white paper in full.

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