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Air cargo boom collides with the rising cost of aviation

Global economic growth and the particular strength of the technology and manufacturing sectors have left the airfreight industry riding high. That said, the sector finds itself uniquely pinched by factors outside its control. Those factors, of course, include runaway fuel prices. But cargo airlines, aircraft lessors and freighter conversion shops are also reeling from the surging expense of acquiring aircraft and engines, and then maintaining those assets. Lease rates for older Boeing 777-300ERs - prime candidates for cargo conversions - have increased $200,000 monthly in the last two years, partly because passenger airlines are holding on to such types, Anna Kopinski, director of asset valuations at mBa Aviation, said last week at the Cargo Facts Symposium in Nashville. Another example: the oldest 777s were worth about $30m at end-2024. "Now, you can't get a half-time aircraft for anything under [$40-45m]," Kopinski adds. "That's a lot of capital." The inflated values come amid a period of strength for airfreight. "Cargo demand is outpacing cargo capacity," Pooja Gardemal, managing director of aircraft appraisal firm BK Associates, said at the event. Airfreight demand increased 4.4% year on year in August, buoyed by a rising manufacturing sector, IATA reported in its most recent monthly air cargo market analysis, with growth concentrated in North America and Asia Pacific. Meanwhile, Airbus predicts airlines over the next 20 years will need 2,670 additional freighters, including 1,140 small, 860 midsize widebody and 670 large widebody jets, according to its 2026 Global Market Forecast, released last week. "It has been a very robust year," says FedEx Logistics president Marcus Balzereit, citing "immense growth" in the manufacturing, healthcare, technology, automotive and aerospace sectors. Meeting that demand while making the economics work is the trick. George Dimitroff, head of valuations at fleet consultancy Cirium Ascend, says midlife 737-800s are now changing hands for about $20m. Paying that much and then converting the aircraft to a freighter is economically feasible, he adds. Engines are driving much of the price spike, a consequence of high demand for, and limited supply of, new engines, used engines, spare parts and maintenance capacity. Even "unserviceable" CFM International CFM56-7Bs, which power 737NGs, have recently been selling for $7m, "which is unheard of in my career", Dimitroff says. Parts shortages are so acute that MTU Aero Engines North America this year purchased 15 GE Aerospace CF6s solely for access to the engines' life-limited parts, says vice president of sales and marketing Les Cronin. Maintenance expenses are equally frustrating. "We've seen maintenance costs rise incredibly," says mBa's Kopinski. Have a Rolls-Royce turbofan that needs overhauling? Expect to wait one year for a maintenance slot, then another four months for the work to be completed, says Titan Aviation Leasing's vice-president of technical, Juan Zapata. Some maintenance shops are needing more time - six months - to complete overhauls, or about twice as long as previously, says Western Global Airlines chief executive James Neff. Want to scoop up an engine from the aftermarket? Good luck. "We're starting to see this continuous shortage of engines available in the market", which "drives up the prices", says Zapata. Challenge Group, which owns several cargo airlines, has so far been successful in acquiring aircraft already equipped with engines, but the severity of the problem leaves operators facing the prospect of acquiring engine-less airframes, then later sourcing turbofans, says Challenge chief commercial officer Or Zak: "There's not much more that we can do." Prices will likely remain elevated and capacity will remain tight for the foreseeable future, until aircraft manufacturers accelerate new-jet production. Then, more used aircraft will become available and prices will ease, executives say. "I think we're looking at post-2030 before you see feedstock values for the 777-300ERs coming down to a point where it's once again a viable [conversion] option," says Kopinski.

TAP Air Portugal eyes cargo demand for Orlando flight

TAP Air Portugal and sales agent America Cargo GSA are hoping that the airline's new direct flight to Orlando will prove valuable for their cargo customers. The service is due to launch on 29 October and is the only direct connection between Lisbon and Orlando. The service will operate three times per week using an Airbus A330 aircraft. Flights will depart on Monday, Thursday and Sunday and the service will offer between 45 and 60 tons of capacity each week. One of the main selling points of the service is the two-hour time saving it offers comapred with non-direct flights. "TAP Air Portugal is making history this winter by becoming the first airline ever to offer a direct connection between Orlando, home to leading American aerospace, tech and industrial manufacturers, and Lisbon, a well-situated, less crowded gateway into Europe and an excellent bridge to South America," said Jean Ceccaldi, chief executive of ECS Group. "TAP's new service shaves hours off existing two-leg connections and is therefore a highly attractive alternative, particularly for shippers of high-value, time-sensitive goods such as aerospace parts, electronics, medical technology and industrial machinery, alongside other specialised exports such as seafood and vegetables. "America Cargo GSA is working in close collaboration with major forwarders and reports keen interest in TAP Air Portugal's latest routing." Rúben da Silva Jorge, head of sales North America at TAP Air Cargo, added: "Market feedback has been extremely encouraging. Customers have responded positively to the new non-stop service, and we are optimistic about developing Orlando as both a strong local market and an important gateway within our network. "Together with our GSSA partner, America Cargo GSA, we look forward to serving our freight forwarding customers." The new service launch comes shortly after the Portuguese government selected Lufthansa's bid for a stake in TAP Air Portugal ahead of the Air France-KLM Group. The deal will allow Lufthansa Cargo to expand its offering between Europe and South America - in particular Brazil - and Africa from TAP's Lisbon and Porto hubs. Meanwhile, TAP will gain access to Lufthansa's strong network heading east and its fleet of freighters, allowing it to expand the types of cargo it can carry.

Navia Deepens Southeast Asia Reach With New Office in Johor Bahru

The company's second Malaysian location puts it on Singapore's doorstep and one of the world's busiest trade corridors. This week, Navia announced the opening of its freight forwarding office in Johor Bahru, Malaysia, continuing its expansion as a global player. This is its second location on the Malay Peninsula, its twelfth in APAC, and the next phase in its growth journey. The choice of Johor Bahru as a location was based on a few key factors: Singapore is on the doorstep, deeper coverage across Malaysia, and a relentless ambition for growth. "Our expansion has always followed our customers.... Johor Bahru is us continuing to back the core markets that matter to them." Johor Bahru sits minutes from Singapore, connected by the world's busiest land border crossing, with over 350,000 crossings a day (roughly four times the daily volume of San Diego-Tijuana's San Ysidro crossing, which the U.S. Bureau of Transportation Statistics says is 87,569 crossings a day). A new rail link, opening later this year, will make that journey just five minutes. The state is also home to Port Tanjung Pelepas, the world's 15th-busiest seaport, handling over 14 million TEUs a year, and Senai International Airport. Since January 2025, the Johor-Singapore Special Economic Zone (JS-SEZ) has enabled duty-free trade and a single permit for land cargo moving between the two countries, targeting RM260 billion (approximately S$81 billion) in GDP for the zone, with 7% annual growth by 2030 according to Johor state government predictions. In practice, that gives Navia customers a team with direct access to Singapore via sea and land. Take a shipment from Shanghai landing at Tanjung Pelepas: freight that once needed to clear through a third-party agent before reaching Singapore can now move under one Navia team, with one coordinated Navia solution, from origin port, to bonded storage, to final delivery. All of it is tracked with the same Critical Chain exception visibility and live reporting from the NaviaHub that Navia's customers already use every day. The new office extends Navia's coverage across Malaysia. Alongside its existing Penang office, the Johor Bahru team now places Navia near Port Tanjung Pelepas, where a significant share of its freight already moves through. The Johor Bahru office marks the second expansion Navia has made this year, following the launch of TCI Navia in China in August, another step in the company's growing footprint. "Our expansion has always followed our customers, not the other way round. We've been invested in Malaysia for seven years, and Johor Bahru is us continuing to back the core markets that matter to them. This is another step forward, not just for Malaysia but for what we're building right across the region. What excites me most is the talent we're adding on the ground and the capability we're bringing in-house, so customers get the full Navia ecosystem working for them as one team.", said Simon Borg, Group CEO of Navia. About Navia: Navia is a global freight forwarder and 3PL provider. Founded in Australia in 2003, Navia has grown into one of the largest independently-owned logistics providers in the market, with offices across Australia, China, Hong Kong, Malaysia, New Zealand and the United States. Being independently owned allows the Navia team to provide customers with the network and reach of a multi-national, coupled with the care and attention freight requires. All of this is backed by the NaviaHub proprietary platform, which gives customers real-time SLA reports and exception management down to the SKU-level. https://naviafreight.com Media Contact: Greg Amanatidis, Director of Marketing, [email protected]