CMA CGM Air Cargo is moving to expand its aircraft fleet. Following the end of its partnership with Air France KLM Martinair Cargo, the air freight arm of French shipping giant CMA CGM decided to add more freighters to its lineup.
Instead of fielding two Boeing 777-200 cargo planes and four Airbus A350 freighters, it now wants three 777Fs and eight A350s. The airline expects to take delivery of two 777s this year, with the third due in the first quarter of 2025.
The plan is to use them to expand trans-Pacific flights, to be operated by Atlas Air.
Boeing has been slow to deliver 777 freighters this year.
Six came off its production line in March but could not be delivered, as the plane maker was waiting for engines, while GE was struggling to ramp up production of jet engines.
The same problem had already held back five more 777s on the ground, and Boeing ended up not delivering a single 777F in the first quarter.
Tom Crabtree, managing director of the Trade and Transport Group, a provider of transportation services in Seattle, warned that deliveries of large widebody freighters would be slow for the remainder of this year.
There is little hope of converted widebody freighters stepping into the breach. Feedstock for conversions has been tight across the jet aircraft spectrum as airlines have scrambled to boost their fleets to meet rampant travel demand.
With leasing rates for passenger planes soaring again over those for freighters, lessors are not interested in conversions at the moment, as airlines renew leases for ageing passenger planes that had seemed destined for conversion. The clamour for widebody passenger planes has driven residual values of potential conversion candidates to stratospheric heights that all but rule out modification into freighters at this point.
The lone exception in this bracket is the 737-800 freighter, where a veritable conversion frenzy led to an oversupply of the aircraft.
Bob Convey, vice president of sales and marketing of conversion specialists Aeronautical Engineers Inc. in Los Angeles, observed that a significant number of those have been parked, and some have been stripped of their engines to power passenger 737s.
Belly capacity is not poised for rapid expansion either.
The supply of new passenger planes has been hamstrung by both supply chain and safety issues.
U.S. aviation authorities have conducted an investigation into allegations that sections of the 787 were improperly fastened together. This affects more than 1,000 787s in service and has slowed Boeing’s output of the aircraft.
At the end of April, American Airlines announced reductions to its international schedule – temporarily suspending some trans-Atlantic routes and scaling down frequencies on others – due to delays in 787 deliveries.
The airline was supposed to receive six 787s this year but will end up with only three. Demand for 777 passenger aircraft has been augmented by the fact that Boeing has not delivered any 777-300ERs for about two years.
The plane maker was set to shift production to the larger 777X, but at this point it is anybody’s guess when it will obtain certification for the type.
Owing to the safety problems associated with the 737 Max that emerged after a panel disengaged from the fuselage of an Alaska Air 737 earlier this year, the Federal Aviation Administration (FAA) has mounted an in-depth scrutiny of the plane maker’s production process.
Besides slowing the output of Boeing planes, this has tied up a significant number of FAA inspectors.
The agency has been notoriously short of staff, which the additional work has aggravated further, and the ripples from this are affecting the certification of aircraft types, among other things.
This has not only delayed the green light for the 777X to enter passenger service, it is also affecting the certification process for the conversion of 777s into freighters.
Israel Aerospace Industries and Mammoth Freighters are working on their initial 777 conversions but have to wait for the authority to certify their programs. The former was supposed to obtain its certificate in the first quarter of this year and now expects this to come through during the summer.
Converted 777s are not expected to have a meaningful impact on the cargo market before next year.
Aircraft makers have been hamstrung by shortages of components and materials, forcing them to slow down their output of planes. Boeing was planning to ramp up aircraft production this year, especially for 737s, but this has been reined in by the FAA while it investigates the manufacturer’s processes.
An earlier audit found 97 instances where Boeing and supplier Spirit AeroSystems (a former part of the manufacturer that had been spun off) had failed to comply with manufacturing control requirements.
These woes come on top of supply chain problems that have troubled aircraft manufacturers for the past couple of years, from a shortage of parts to raw materials. On top of this, airlines are facing further pain in the maintenance cycle. A combination of manpower shortages – engineers and technicians – and limited slot availability for maintenance work has created another bottleneck.
An early resolution is not in sight. Airbus management reckons it will take a year to clear the bottlenecks in the aviation supply chain. In the meantime, shippers and forwarders will have to scramble to find lift for their traffic.
According to the International Air Transport Association, demand in air freight has shown double-digit year-on-year growth for four consecutive months.
In March, the most recent month it has covered, capacity grew at a slower rate than traffic. If this trend continues, CMA CGM could be doing rather well with its expanded freighter fleet. After all, the trans-Pacific sector has arguably the greatest need for freighter capacity as passenger service – particularly in the ChinaU.S. market – remains constrained.
Assuming, of course, that the carrier’s new freighters will not suffer any serious delays to join its fleet.
By Ian Putzger
Air Freight Correspondent | Toronto