Cost of fuel may force airlines to pull out of air cargo market
Firms on tight budgets that convert ageing aircraft into freighters lack the funds to buy new fuel-efficient equipment
Air cargo and passenger airlines using older fuel-guzzling long-range freighters could pull out of the air cargo market this year as they battle falling yields and persistently high fuel costs, according to industry observers.
They said this could remove capacity and help balance supply and demand growth, which would support yields for major airlines in the air freight market.
Explaining one scenario, one senior executive said: "All-cargo airlines using Boeing 747-200/300-like freighters could fold, while combination carriers flying passenger aircraft and older freighters could retire their cargo planes and pull out of the cargo business."
All-cargo airlines using Boeing 747-200/300-like freighters could fold, while combination carriers flying passenger aircraft and older freighters could ... pull out of the cargo business
While reluctant to name names, he added: "These carriers don't have the financial resources to invest in new fuel-efficient equipment."
Nick Rhodes, Cathay Pacific Cargo director, said the observations about the difficulties facing traditional cargo airlines at present "were spot on".
He added: "Those carriers operating older Boeing 747s on long-haul routes will find it extremely difficult to make a positive return in the current climate, even if the aircraft are fully depreciated. I imagine this will lead to more aircraft being parked or even scrapped in the coming year.
"Given the amount of capital expenditure required to buy a new wide-bodied freighter, together with the high operating costs and the pressure on yields, it is virtually impossible for any commercial airline to make a convincing case to its board to invest in new aircraft. The numbers simply do not add up in the current operating environment."