The blow dealt to the airline industry by Covid-19 a few years ago was mitigated by pax flights carrying PPE gear and a climbing ratio of passenger aircraft converted into freight carriers following in the pandemic’s wake.
But, as the market increasingly self-corrects, conversion numbers are expected to continue falling throughout the year, driven by overcapacity in the narrow-body market and weaker demand levels.
Air Cargo News (ACN) has reported that during an IBA webinar on the future of the freighter market, advisory and consulting director Mike Yeomans said the aviation intelligence firm anticipated cargo demand growth to moderate to 5% year-on-year (y-o-y) in cargo tonne km terms.
For 2025, this would represent an 11% y-o-y decrease.
In addition, the cargo load factor is expected to decline slightly to around 45%.
However, the demand forecasts were further affected by the potential impact of US tariffs on China and the potential withdrawal of the de minimis exemption.
All in all, it means overcapacity may be a dominating narrative for the airfreight sector in 2025.
On the supply side, IBA manager of classics and cargo aircraft, Johnathan McDonald, said the narrow-body freighter market was expected to be affected by overcapacity due to the high number of conversions carried out in the post-pandemic era.
IBA figures show that in 2023 more than 120 narrow-body aircraft were converted into freighters. Last year this fell to just over 70 aircraft.
Looking at types, the Boeing 737-800 conversion declined to 2021 levels last year and is likely to fall further this year; he pointed out that Boeing’s Gatwick line had now closed.
Conversions of the Airbus A321-200s also declined from 2023 levels, although not to the same level as 737-800s, and there were reports of some examples being returned to lessors.
Overall, he stated that the next few years were expected to be quiet for the narrow-body market as feedstock was difficult to acquire and there was overcapacity in the market.
ACN also reports lease rates for narrow-body aircraft have been trending downwards over recent years as a result of lower demand levels. In contrast, feedstock pricing remains high, the combination of which is putting further pressure on the narrow-body market.
The widebody conversion market is also being affected by the limited feedstock of the Boeing 767-300ER aircraft, which has been the most popular widebody conversion for a number of years.
Conversion numbers for the 767-300 fell from almost 45 in 2023 to just over 20 aircraft in 2024.
Meanwhile, conversions of the Airbus A330-300 increased in 2024 as more conversion lines came online. There was a possibility that the number of A330-300 conversions could exceed that of the 767 this year, McDonald noted.
Overall widebody conversions were down from around 55 in 2023 to just under 40 in 2024.
Looking ahead, widebody conversions are expected to fall from just under 40 last year to closer to 30 this year, and narrow-body conversions are predicted to be down from just over 70 last year to just under 50.
The narrow-body conversion market will be at its lowest level since 2020, while the widebody market will be at its lowest level since 2021 as conversion numbers return to pre-Covid levels.
IBA also took a look at the much-anticipated 777-300ER conversion programmes. It stated that three 777-300ER programmes were still in the works—IAI, Mammoth, and Kansas Modification Center—and IAI was expected to be the first to gain certification.
However, McDonald stated that feedstock was expected to be more limited than initially thought as delays to the Boeing 777X passenger model meant that airlines were holding onto their 777-300ERs
