B747-200F Values Continue to Falter In Face of High Fuel Prices

The values of the B747-200F are facing further declines in the face of less rampant demand for cargo space and higher fuel charges. The demand for freighters remains but the focus is firmly on those newer types that are able to offer lower operating costs. The older aircraft continue to be at a disadvantage...

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The values of the B747-200F are facing further declines in the face of less rampant demand for cargo space and higher fuel charges.

The demand for freighters remains but the focus is firmly on those newer types that are able to offer lower operating costs. The older aircraft continue to be at a disadvantage. Jett8 Airlines Cargo of Singapore for example has leased a second B747-200F from Nippon Cargo. However, because of higher fuel costs, an additional three -200Fs that were due to be acquired during 2008 have now been cancelled. The operator is instead seeking B747-400Fs or -400BCFs which will be hard to find. This preference for more modern aircraft is becoming increasingly widespread. Values of earlier models therefore have little opportunity to compete and are continuing to decline. The values of the B747-400F by contrast remain resilient though even these may be expected to suffer should cargo growth continue to falter at a time when lower hold capacity on the larger widebodies is increasing.

The lesser growth rate of cargo traffic in 2007 compared to 2006 may also be the result of a classic cash of rising freight charges. Airfreight operators have increasingly placed fuel surcharges onto freight rates. With the improvement in surface transportation and lesser impact on direct operating costs caused by higher fuel prices, there has been some diversion away from the use of airfreight. The increase in regional freight traffic via surface transportation has also caused lesser demand for airfreight.