Decisive Shipping Services LLC – Dubai

Call us : +971 50 3363075

Email us : info@decisive-shipping.com

Opening time : 9am to 6pm (Sun-Thu)

Welcome to Decisive Shipping Services LLC

Welcome to Decisive Shipping Services LLC

Conversions to cool in second half of the decade – Air Cargo News


Freighter conversions are expected to cool in the second half of the decade after nearly doubling in the last few years.

In a LinkedIn post, Mike Stengel, senior associate at AeroDynamic Advisory, said that in the 1990s the average number of conversions each year was 57, in the 2000s this increased to an average of 63 per year and in the 2010s there was another increase to an average of 70 per year.

However, AeroDynamic Advisory expects this figure to increase to around 180 per year by 2025 and then to cool to 160 per year.

Stengel said the increase was fuelled by the addition of around 30 new STC lines, strong feedstock due to the impact of Covid on passenger markets and low current feedstock values, which has stretched the conversion window to younger aircraft.

He points to DHL’s acquistion of two B767s less than 10 years old and the conversion of a 2013 A330.

There is also currently a requirement for conversions on the demand side due to e-commerce growth, the shortage of belly capacity and modal shift from the troubled ocean shipping market.

However, looking further ahead Stengel is expecting the number of conversions to cool.

He said that belly capacity is expected to recover to pre-Covid levels by the end of 2013, which will provide extra cargo capacity and also reduce the amount of feedstock as aircraft are put back into action on passenger duties. This will also push up the price of feedstock.

Meanwhile, issues in ocean shipping will eventually be resolved and “small shifts for sea freight result in large demand fluctuations for air cargo”.

“For these reasons, while our firm projects a healthy uptick in conversion volumes through 2025, we believe there will eventually have to be a reckoning and volumes will soften in the second half of the decade,” he said. “For conversion and equipment suppliers, the silver lining is that even after this softening, we expect that conversions will still be at historic levels.”



Source link

REQUEST A QUICK QUOTE