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Air Cargo Is Moving, Just Not as Much in Air Cargo Freighters as Formerly

For the world's biggest maker of air freighters, the most formidable competition is coming from the bellies of its own passenger planes.

Air Cargo Is Moving, Just Not as Much in Air Cargo Freighters as Formerly

Sales of cargo versions of Boeing’s 777 and 747-8 aircraft have stalled as British Airways, Delta Air Lines, FedEx, operator of the world’s largest cargo airline, and other carriers ground older cargo planes and transfer freight to Boeing’s widebody 777 passenger jets. The shift is forcing Boeing to rethink its cargo business as a glut of large passenger jets hits the market over the next two years.

“I haven’t sold a widebody freighter in four years,” says Glen Langdon, president of Langdon Asset Management, a San Francisco company that sells used 747s and other large commercial jets. “I was stunned and amazed by just how much capacity there is below deck,” Langdon says of the newer 777 passenger jet, which can carry 7,120 cubic feet of freight—25 percent more than Boeing’s 747 passenger jumbo—and as many as 386 people. The 747-8 and 777 are among Boeing’s priciest models, listing for $357.5m and $300.5m, respectively.

Airfreight transports goods that account for about 35 percent of the total value of global trade, everything from semiconductors to iPads to this year’s Beaujolais nouveau. Demand has been slow to return since the economic crisis. Tepid growth during the recession, especially in the U.S. and Europe, meant that shipments moved to cheaper and slower modes of transportation. Still, airfreight accounted for about $60bn in sales in 2013, roughly one tenth as much as global passenger airline revenue.

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