I don’t think it is a stretch to suggest that 99% of readers of this blog will have had a package delivered to their front door in the past 6 months, and it probably isn’t unreasonable to suggest that some 40% of readers may be waiting for some sort of delivery right now! The shift to e-commerce and online retailing is one of the most disruptive industry trends we have seen over the past two decades, and it shows no sign of abating.
In 2019, e-commerce sales worldwide amounted to $3.53 trillion US dollars and are expected to double to $6.5 trillion by 2023. Growth will take place across every region on the planet but will be underpinned by transformative progression in emerging markets such as Asia Pacific (25%), Latin America (21%), and the Middle East/Africa (22%).
GA Telesis is proactively addressing this growth by investing in the next generation of narrowbody freighter conversion aircraft. Post conversion, we will provide the freighters to our cargo airline partners worldwide to ensure they can capitalize on the opportunities this continued growth will bring.
As of 2018, 750 narrowbody freighters were operating globally. According to Boeing’s 20-year projection, that fleet will grow to approximately 1,400 aircraft by 2038. As of today, some 270 or so of those aircraft are more than 30 years of age, and for the most part, we believe the 737-800 freighter is the logical fleet replacement and most cost-effective solution for the anticipated growth.
Aside from improved fuel burn (approx. 15% better than the 737-400SF), lower operating cost (10% lower than the 737-400SF), and reduced maintenance cost as a result of longer maintenance intervals – the 737-800 converted freighter also has greater cargo-carrying capability both in the upper hold (one extra pallet position v the 737-400SF) and the lower hold (approx. 9m3 more than the 737-400SF). We believe this aircraft will provide the perfect operating base for both established cargo operators and new entrants to the market looking to grow into the ‘express’ or e-commerce cargo space where next day delivery is becoming an essential requirement.
There are several other statistical trends we could refer to, which supports the argument for the 737-800 freighter. Our first 737-800SF aircraft will be converted by AEI and will become available for sale or lease in December 2020. Beyond the -800SF, GA Telesis has a broader freight strategy, and I would enjoy the opportunity to discuss this with you further. Please feel free to reach out to me directly to discuss how GA Telesis can assist you with your cargo plan, either as an investor, operator, or lessor.