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AIRCRAFT FOR THE BOOMING FREIGHT MARKET

Tom Crabtree, Regional Director of Cargo Marketing at Boeing is confident: "Over the next twenty years the volume of the global air freight market will triple." Boeing expects the sector to grow at an annual rate of 6.4% and, as such, significantly more strongly than passenger traffic, which is expected to grow at 4.8% per annum. Against this background, the primary growth markets according to Crabtree will be China and south-west and south-east Asia. And if the market volume really increases on the scale predicted, it follows that the cargo fleets will need to be stocked up with higher capacity aircraft accordingly. Crabtree is working on the assumption that the number of aircraft in the sector will double to comfortably exceed the 3,000 aircraft mark by the year 2019.

Boeing 747 Freighter

But because ever keener competition among the freight airlines is putting pressure on their profit margins, he also predicts that a large proportion of the additional cargo jets will be converted passenger aircraft. According to Crabtree, the practice of carrying freight in the hold of passenger aircraft will recede significantly as ever more stringent hand luggage rules are forcing passengers' hand bags, carrier bags and rucksacks into the hold, severely restricting the space available for cargo. Another factor is the steady increase in utilisation of passenger aircraft. The result is a trend towards more dedicated freighters.

Hence, with demand increasing sharply, the conversion market, i.e. the market for fitting "worn-out" passenger aircraft with large loading bays and freight floors for a second career as a freighter, should develop into a lucrative ancillary business for aircraft manufacturers such as Boeing and EADS. This means that older passenger aircraft will be disappearing from the market, encouraging the airlines to buy the latest models instead.

In the cargo industry airframe age is much less important than in passenger transport. As loading and unloading often last many hours and because, apart from on the major trunk routes, the global cargo airline network is served "only" once a day or every few days, the aircraft do not spend as many hours airborne as their passenger aircraft cousins. As a result they do not depreciate as quickly and last a considerable number of years even if they are already somewhat elderly. And because they are not used so intensively, low fuel consumption and the most modern aircraft systems geared towards maximising productivity are of less relevance in the cargo business. Thus it could be an old 727, an A300 or even a former Jumbo that is picked up at any time on the second-hand market without incurring the expensive financing costs of new aircraft.

However, a keener wind is blowing in the market segment of the package distribution airlines such as FedEx, UPS, TNT and DHL. Here, most air freight is "volume-critical" rather than "weight-critical". This means that aircraft tend to run out of space before the maximum payload is reached. For, in the age of global package services and the Web economy, often it is only "paper in polystyrene packages" or documents which take up a lot of space or other relatively light items that need to be transported. The speed at which this type of packet is required to be delivered is increasing all the time: anyone who orders a book on the Internet today will want to have it in his hands as soon as possible on the next day. And if the specialist stores run out of the latest computer games console in the stampede, then it is essential that the goods can be supplied from Japan while the Christmas shopping season is still on.

Many parcel delivery services guarantee delivery "on time". It may therefore pay their networked route systems with high punctuality requirements to purchase new aircraft. These can operate under any weather conditions and do not develop unpredictable age-related faults. Moreover, the aircraft often need to operate at night at noise-sensitive freight hubs, but without the latest, significantly quieter engine technology many of the noise regulations cannot be adhered to.

In the classical air freight business things are somewhat more relaxed. Cargo such as important machinery and spare parts still arrives at its destination significantly quicker even if the journey has taken several days, than if it were to be transported by ship. Shipment by air has the additional advantages over transportation by sea that the cargo is not exposed to the risk of theft in harbours or to possible damage from the salty sea air.

Depending on the transport urgency and the achievable price, classic air cargo is conveyed either immediately or else only when capacity becomes available. But if need be, sensitive cut flowers, live animals and perishable goods can routinely be flown within hours and in large quantities around the world.

Most cargo is transported between the freight company's own hubs, reloaded there and then transported onwards on a new flight. For example, many freight carriers make an intermediate stop in the Gulf en route between Europe and Asia. Up to now this has meant that the payload capacity was more important to the freight airlines than range. There is less demand for ultra-long distance flights other than in the passenger network.

Many pilots like working in the cargo industry because of the sometimes exotic destinations which are particularly interesting to pilots and the informal working atmosphere. What passenger crew is allowed to clamber into the cockpit of a jumbo jet wearing scruffy clothes? With cargo airlines informal dress is often not a problem. On the other hand the meals are not as luxurious as those enjoyed by colleagues in passenger services as you can be sure that there will not be any left over portions from First Class here.

Dispersion of the freight is often carried out via "connecting flights at sea level", i.e. by truck. And in fact Tom Crabtree of Boeing even expects the volume of lorry traffic to increase in the USA. 60% of the US population live to the east of the Mississippi, i.e. within a relatively confined area that is therefore accessible by truck. Hence Boeing expects to be selling new transport aircraft primarily for medium and long-range operations.

Cargo that is particularly heavy and bulky will often no longer fit into normal freight aircraft. In such cases specialist companies are called in. Often these charter aircraft of military origin from Russia or eastern Europe for the purpose. Many a veteran military Antonov or Ilyushin is serving out its old age in civilian colours as a large-capacity freighter. Wide rear ramps and minimal requirements for ground infrastructure and airport quality make these robust aircraft suitable for exotic missions for which classical jets are unsuited without modification. Naturally the in some cases extremely low wages paid to the crew play a role here.

Precisely with this market segment in mind, Boeing would now like to offer a civilian variant of the modern C-17 military transporter as the freighter BC-17X. However, whether the hard competitive pressure will permit a costly specialist aircraft like the BC-17X remains to be seen.

At any rate the US Air Force would love to be able to use additional civilian BC-17X's in times of crisis, just as it has contractually guaranteed access to a part of the American 747 cargo fleet. In return, the Department of Defense pays some of the maintenance and refurbishment costs, making the deal highly attractive to many freight airlines.

Boeing's jumbo jet changed the freight market permanently. The civilian 747 was originally a by-product of the competition to supply a large-capacity military transporter for the US Air Force, which was won by Lockheed with the C-5 Galaxy. Given this background, it had an unusually high and wide fuselage cross-section for a civilian aircraft, and at the beginning of the 1970s it was often barely filled with passengers. The airlines therefore ordered the 747 as a combi, carrying passengers in the front and freight in the rear until increasing numbers of the aircraft were flown simply in the cargo role.

While the combis have become unfashionable today due to unresolved fire protection issues, dedicated freighters now account for approximately half of new 747-400 production. And a hot competition has already erupted over their successor, for as well as Boeing's stretched and modernised 747X Stretch Freighter, there is a new contender, Airbus's jumbo-sized A380F freighter. And whereas Airbus has already notched up a firm order from FedEx, so far Boeing has not met with any success in marketing its latest jet.

Interestingly, the A380 does not have a nose which folds back, as the 747F has. And the internal cabins of the main deck in the A380 are, at 2.4 and 2m, lower than the main deck of the 747, into which freight as high as 3m can fit. For parcels carried in standard containers this characteristic is of little relevance, and an A380F in any case has the volume capacity of 2 MD-11F's.

The MD-11F is in fact one of the most popular cargo aircraft around today. While the passenger version has not been a particular success due to inadequate range, many freight airlines would happily order more of the three-engined aircraft if it were only still in production. But Boeing is not taking any more orders for the MD-11 it inherited from McDonnell Douglas, so that it is likely that before long the entire available stock of passenger aircraft will be retrospectively converted to the much sought-after freighters.

And when it comes to the market for a direct successor, once again, as for the 747, Airbus will be waiting in the wings. Spokesman Tore Prang told FLUG REVUE that the European aircraft manufacturer has recently decided to offer its A330-200 in future as a freighter with a 63.1 tonne payload and a 7,870 kilometre range.

From page 30 of FLUG REVUE 4/2001