A few months ago, I blogged about the renewed strength in the air cargo sector. My colleagues and I had been hearing from freight operators who were seeing strong traffic across their network and equally impressive yields.
We saw it in the data. Freight tonne kilometers (FTK) grew three times faster than available freight tonne kilometers (AFTK) in 2017. Simply put, the growth in demand was far outstripping the increase in capacity.
While capacity has been catching up with demand in 2018, the key metrics continue to show favorable conditions for cargo operators.
In April, air cargo yields – the average fare to transport one ton of freight one revenue mile – grew 11 percent over the prior year, according to industry data. That’s remarkable in and of itself, but the increase also marked the eighth straight month of double digit yield growth.
The continuing positive momentum explains why many operators are looking to adding more freight capacity.
As you likely saw, FedEx Express, the world’s largest air cargo carrier, announced yesterday it is ordering 24 more medium and large cargo jets (12 Boeing 767 Freighters; 12 Boeing 777 Freighters) in a deal valued at $6.6 billion at current list prices.
With the FedEx order, we have sold more than 50 widebody freighters in 2018 or about five times more than what we sold for all of 2017.
If we look back further, Boeing has now sold nearly 170 widebody freighters since the start of 2014, equating to a 97 percent share of the market. In that same time, Boeing has delivered about 140 widebody freighters, which translates to a 91-percent share of deliveries. Our commanding lead in air freight supports our overall leadership in the widebody segment where we have achieved 67 percent share of orders since the start of 2014.
And I can tell you that we have more sales activity in the pipeline as we talk with customers around the globe about Boeing’s family of freighter solutions, including the largest and longest-range twin-engine cargo jet in the 777F and our new 737-800Boeing Converted Freighter.
So watch this space as air cargo keeps going. By the way, I will be sharing our analysis on this topic at the 2018 Farnborough International Airshow. If you are coming to the show, stop by the Cargo Village on Tuesday, July 17 for a session on “The Compelling Future of Air Cargo.”
Speaking of Farnborough, as we get closer to the show, I will post another blog to share some thoughts on the commercial market as we pass the half-way mark for 2018. And what’s on your mind? Please share your thoughts in the comments section below.
Meanwhile, if you missed it earlier this year, check out my blog in April that examined the factors driving the air cargo growth. It is not just about e-commerce… Air Cargo Carries Growth Momentum Into 2018