As trans-Pacific passenger flights increase, hold capacity drives structural changes in air cargo

The cargo industry has been clear it is suffering from the external problem of weakened supply amid a gloomy economic environment. But less apparent is the fact that the pain is largely self-inflicted: long-haul passenger flights are growing rapidly, increasing 25% on trans-Pacific routes between 2006 and 2013. That also directly increases the amount of belly capacity available for cargo, and the trans-Pacific is the world's largest cargo market.

Increasingly the aircraft of choice across the Pacific is the 777-300ER, which can carry upwards of 18% more cargo volume than the 747-400. And the 777-300ER is displacing the 747-400, with the twinjet increasing its share of trans-Pacific flights from less than 1% in 2006 to 27% in 2013. The 747-400 meanwhile accounted for 40% of flights in 2006 but only 15% in 2013.

This trend is structural and ongoing as carriers look to add trans-Pacific passenger capacity. Northeast and Southeast Asian carriers hold 29% of the 777-300ER backlog, and airframe manufacturers plan for their next-generation aircraft to carry even more cargo. This all brings into focus: just how strong is the future for dedicated freighters?