CAVU Café: Royboy’s Prose & Cons

*Note: The views expressed in CAVU Café: Royboy’s Prose & Cons blog are those solely of the writer and are not necessarily shared by the Aviation Suppliers Association or the Association’s staff, members, or Board of Directors.

   About Roy Resto


Noteworthy is a compilation of interesting news items presented in summary form.

In this issue:

  • Stats: buoyancy of the freighter aircraft marketplace1
  • Millions retired early during the pandemic. Many are now returning to work, new data shows2
  • Bolen Calls for 'Bold Actions' To Address Aviation Workforce3
  • Changes to inventory: Stock on Hand4
  • Stats: Advanced Air Mobility (Drones)5
  • World’s Largest Jet Engine6
  • Boeing Commercial Forecast Excerpts7
  • From Just In Time to Just In Case8
  • Global aviation will need 602,000 pilots by 20419

    IBA outlines continued buoyancy of the freighter aircraft marketplace

    The Boeing 737-800 freighter fleet has almost doubled in size to 113 from 59 a year ago, demonstrating its sustained appeal as an aircraft of optimal size and value for conversion. Despite its increasing legacy status, the Boeing 767-300 freighter fleet has also continued to grow from 127 to 156, driven by the plentiful availability of feedstock aircraft from retiring passenger fleets.

    Despite their much smaller baseline numbers, data from IBA’s InsightIQ platform demonstrates a clear growth in the Airbus converted freighter fleets. The A321 freighter fleet has doubled from four to eight aircraft over the past year, while the size of A330 (-200 and -300) fleet has also increased from 10 to 16.

    The growth in demand for all of these aircraft types is illustrated by the increasing number of conversion centres for each, with at least nine facilities becoming active for the A321, six for the A330 (with IAI still to announce) and 15 for the Boeing 737-800.

    The number of conversion lines for the Boeing 777-300ER is also growing as demand increases. IAA, which initially unveiled its conversion programme for the aircraft in 2019 with a single line, has approved two others. Further conversions programmes have now been rolled out by NIAR WERX and Mammoth Freighters.

    Over the past twelve months, IBA estimates that the market values of most freighter types have remained stable with only a slight drop, especially in younger model aircraft. The value of a 2006 build Boeing 737-800BCF has dropped by just 3.7% to US$21.23 million, and the value of a 2001 build A321-200PTF has declined by 6.3% to US$22.79 million. The only major exception are the Boeing 737 ‘Classic’ types where, for example, a 1999 build 737-400BDSF has fallen by a more significant 14% to US$7.05 million.

    IBA’s initial views on the new purpose built wide-body freighter types is that both will command a considerable premium on the existing in production Boeing 777F which is valued at US$157 million. IBA estimates that a new Airbus A350F, with its cargo capacity of 109 tonnes, will have a value of US$172 million while a new Boeing 777-8F, with its marginally greater capacity of 112 tonnes, will have a value of US$187 million.

    During the webinar, IBA also outlined the impact of the Russia – Ukraine crisis on the freighter aircraft market. InsightIQ information shows that there are 23 freighter aircraft on lease within Russia from non-Russian lessors – a fraction of the notable number of passenger aircraft in the same situation, though still significant in terms of asset value. The non-Russian lessors with the greatest exposure in the freighter market are AerCap, with ten freighters placed in Russia, followed by Voyager Aviation and Airwork both with five, although the latter has repossessed one of its aircraft.

    More widely, the restrictions on Russian wide-body freighters operating outside of the country, coupled with detours caused by airspace closures and rising fuel prices have cumulatively affected air freight rates which, as of March 2022, were up 27% year on year.

    Millions retired early during the pandemic. Many are now returning to work, new data shows.

    Millions of older Americans stopped working during the pandemic, far more than usual, stoking fears that the workforce had been permanently altered, but the country is close to closing the gap in early retirements, according to new data.

    An estimated 1.5 million retirees have reentered the U.S. labor market over the past year, according to an analysis of Labor Department data by Nick Bunker, an economist at Indeed.

    Many retirees are being pulled back to jobs by a combination of diminishing covid concerns and more flexible work arrangements at a time when employers are desperate for workers. In some cases, workers say rising costs — and the inability to keep up while on a fixed income — are factoring heavily into their decisions as well.

    Bolen Calls for 'Bold Actions' To Address Aviation Workforce

    Bolen said, citing a need for nearly 100,000 new business aircraft pilots and 770,000 maintenance technicians globally through 2038.

    Changes to inventory, Stock on Hand

    • Two-thirds (66%) of large enterprises globally say they are keeping more stock on hand now compared to the pre-pandemic period, with nearly one in five in total (18%) retaining “significantly more” stock. This growing focus on taking innovative measures to address supply chain disruption…
    • Further highlighting the impact of supply chain disruption, seven out of ten respondents polled for the survey (70%) said they had increased the number of suppliers of materials/products they use in response to recent supply chain issues.
    • Moreover, nearly three-quarters (72%) of the survey sample claimed to have grown the proportion of materials/products they source from domestic suppliers as a result of these issues.

      Royboy’s Note: See related below: From Just In Time…

      Stats: Advanced Air Mobility (Drones):

      The advanced air mobility market, which includes self-driving “flying cars” or passenger drones and electric aircraft that can deliver goods without a pilot, is expected to be $1.5 trillion by 2040, according to An Aerospace Industries Association 2022 report predicts “breakthrough growth” in the industry between 2022 through 2040 and nearly 100,000 jobs will exist in 2040 as a result.

      World’s Largest Jet Engine:

      British engine manufacturer Rolls-Royce has entered the final stage of the assembly of the world’s largest aero engine demonstrator, the UltraFan, 16 months after the company announced the start of the engine’s development.

      Rolls-Royce expects that the UltraFan demonstrator, which has a fan diameter of 140 inches (3.56 meters), will perform the first test run on 100% Sustainable Aviation Fuel (SAF) later in 2022.

      Boeing Commercial Forecast Excerpts:

      • Boeing anticipates demand for more than 41,000 new airplanes by 2041 due to the growing demand for international air travel and easing travel restrictions, according to the company’s 2022 Commercial Market Outlook (CMO).
      • Aircraft deliveries and commercial services together will be valued at $10.8 trillion over the next 20 years.
      • Asian markets are estimated to require the most new aircraft by 2041, accounting for roughly 40% of long-term global demand for new planes.
      • Europe and North America are each estimated to account for just 20% of global demand for new aircraft.
      • Boeing estimates that the freighter fleet will grow by 80%, including new and converted aircraft models.
      • Carriers will need 2,800 additional freighters overall, including 940 new widebody models in addition to converted narrow-body and widebody freighters over the forecast period

        From Just In Time to Just In Case:

        “We’re moving from Just In Time to Just In Case”. Roderick McLean. Vice President and General Manager of Lockheed Martin’s Air Mobility & Maritime Missions business, explaining how supply chain shortages have turned Just In Time Manufacturing on its head.

        Royboy’s Note: See related Changes to inventory… above.

        Global aviation will need 602,000 pilots by 2041

        Boeing has estimated that 602,000 new pilots, 610,000 new aircraft maintenance technicians, and 899,000 new cabin crew members will be needed in order to “fly and maintain the growing commercial aviation fleet” by 2041, in its latest long-term Pilot and Technician Outlook (PTO).

        Over ‘n out

        Roy ‘Royboy’ Resto

          Posted By Jeanne Meade | 8/1/2022 8:58:51 AM

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