Since the outbreak of the COVID-19 epidemic, the global air cargo market has been extremely hot.From November 14th to 18th, the Dubai International Airshow was held in the United Arab Emirates.

Among them, Airbus received its first A350F freighter order and Boeing added a 737-800BCF (Boeing converted freighter) passenger-to-cargo production line, which undoubtedly became the highlights of this air show. Taking this event as a guide, let us follow the article to explore the current situation and future of the air cargo market.

The air cargo market under the impact of the epidemic

The impact of the epidemic on air cargo is far less than that on passenger transport. In 2020, air passenger demand (calculated in revenue passenger kilometers) plummeted by 65.9% year-on-year, but air cargo demand (calculated in freight ton kilometers) only fell by 10.6% year-on-year, and the December data has basically returned to the same level as the previous year. The International Air Transport Association (IATA) predicted in April 2021 that air cargo's proportion of airline revenue will rise from 12% in 2019 to 33% in 2021.

Airlines are responding to the shortage of cargo capacity in a variety of ways. After the outbreak of the epidemic, the "pause" button was pressed for the global air transport industry. According to Cirium database statistics, when the epidemic was at its worst in May 2020, more than half of the world's passenger planes were grounded.

Since the bellyhold capacity of passenger aircraft accounts for half of air cargo capacity, there is a huge gap in air cargo capacity. In order to reduce losses caused by the grounding of passenger aircraft, about 200 passenger aircraft seats around the world were partially or completely removed in 2020 and temporarily used as cargo aircraft, of which Airbus and Boeing dual-aisle passenger aircraft such as A330 and 777 accounted for 81.5%.


Judgment of future demand in air cargo market

The aviation industry is optimistic about the air cargo market and there will be huge demand for cargo aircraft in the next 20 years. According to the market forecast released by Boeing in 2021, the global demand for freighters in the next 20 years is 2,610, including 890 original freighters and 1,720 modified freighters.
Airbus's 2021 forecast is basically consistent with Boeing's. Global demand for freighters in the next 20 years will be 2,440, including 880 original freighters and 1,560 modified freighters.
Additionally, airline executives believe demand for air cargo will continue to grow and have pledged to make air cargo a core consideration in their fleet and network decisions.
Some investors are not optimistic about the continued and steady growth of the freight market. They believe that the special factor of the epidemic has led to the current boom in the air cargo market, which is mainly reflected in the following aspects:
First, during the epidemic, airlines reduced the operation of passenger planes, resulting in a decrease in cargo capacity, which led to an increase in air freight rates. Once passenger capacity returns, the economics of freighters may be lower than expected.
Secondly, the reduction in air freight costs relative to sea freight and port disruptions during the epidemic are the main drivers of strong demand for air freight in the short term. According to IATA data, air cargo costs are usually 12.5 times that of sea freight, but in September this year, air freight costs were only three times that of sea freight.
Finally, according to official US data, service spending remains suppressed due to the impact of the epidemic. Now, as social activities continue to resume, the abnormal tilt towards commodity consumption seems to be fading.


Analysis of competition situation in cargo aircraft market

Boeing dominates the global freighter fleet. As of November 2021, there are a total of 1,918 cargo aircraft in the world, of which Boeing accounts for 88% and Airbus accounts for 12%; the number of narrow-body cargo aircraft, medium wide-body cargo aircraft and large wide-body cargo aircraft is divided into three parts.
Boeing dominates the original cargo aircraft market, and Airbus wants to break its monopoly. Currently, Boeing's three original freighter models, the 767, 777 and 747, are in production. The Airbus A330F freighter ceased production in January this year after delivering 41 aircraft, and then officially launched the A350F freighter in July this year, intending to challenge Boeing again.
According to Reuters, in response to Airbus's counterattack, Boeing discussed the 777X freighter model requirements with customers during the 2021 Dubai Air Show, and planned to adjust the research and development plan to swap the order of the 777X freighter and the 777-8, which means that the 777X freighter may become The second model in the 777X series, potential customers include Qatar Airways.

In the passenger-to-cargo market, Europe and the United States are struggling, and single-channel demand is strong. Modification of an all-cargo aircraft requires structural design of the entire aircraft, and the passenger-to-cargo aircraft conversion enterprise must have STC technical qualifications. At present, the main companies that have or are developing the ability to convert passengers into cargo are Boeing, Airbus and professional third-party design companies (see table below). Domestic companies are still unable to independently provide passenger-to-cargo conversion solutions, and mainly enter the field of conversion implementation through joint ventures with STC holders.

Since the outbreak of the epidemic, faced with huge air cargo demand, Boeing has announced the establishment of multiple 737-800BCF modification production lines in China, South America, Europe and North America, bringing the total number of production lines to 10.

In 2015, Airbus and Singapore-based ST Engineering launched the A320/321P2F project through their joint venture EFW. Currently, the A321P2F has obtained STC and has been delivered for operation, while the A320P2F is expected to obtain STC in 2022.

Competitors are eager to enter the cargo aircraft market. As the rapid development of e-commerce has spawned demand for small cargo aircraft, Embraer made its first forecast of the global air cargo market in November 2021. It is estimated that the global demand for cargo aircraft with less than 150 seats in the next 20 years is expected to be about 700 aircraft, among which the demand for E195 passenger-to-cargo aircraft is relatively large. big.

Embraer is considering the E-Jet passenger conversion option and will make a final decision within the next six months.

UAC also stated in July 2021 that it is considering launching cargo aircraft modifications of SSJ100 and MC-21, and the Russian Post may become the launch user.