Air Cargo

Air Cargo Demand Surges as Aircraft Costs Soar

Strong global economic growth and robust demand from technology and manufacturing sectors are fueling airfreight expansion. Supply constraints, however, are driving up acquisition and maintenance costs across the industry.

Lease rates for Boeing 777-300ERs suitable for cargo conversion have jumped $200,000 monthly over two years, according to mBa Aviation, as passenger carriers retain these widebodies. Aircraft valuations have climbed sharply. Older 777s that cost approximately $30 million at end-2024 now command $40-45 million. Midlife 737-800 freighters fetch about $20 million, with conversion economics remaining viable at current levels.

Airfreight demand grew 4% year-on-year in August, with strength concentrated in North America and Asia Pacific. Airbus projects airlines will require 2,670 additional freighters over the next two decades, including 1,140 small, 860 midsize widebody, and 670 large widebody jets. Engine availability and limited spare parts inventory are primary drivers of elevated costs, according to industry analysts.