A388
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Full Freighters Attractiveness?

Mon Jul 29, 2013 5:20 pm

Hello members,

I meant to start this thread some time ago but couldn't find the time so now I'm forcing the time to do this. There apparently seems to a trend pointing towards air cargo being flown increasingly in the belly space of passengers aircraft. Now, I haven't seen a lot of positive outlooks for the air cargo industry and no light is seen yet at the end of the tunnel what I've been reading so far. Brandnew full freighters are being parked without starting commercial flying. Based on this I can imagine that full freighters may not be the most attractive solutions for air cargo now but at the same time there are still quite a few cargo carriers still flying cargo all over the world.

There is a world conference to be held in Abu Dhabi that will discuss the freighters and belly cargo. I sent them an email for more information on the conference but unfortunately didn't get any feedback.


So my question is: To what extend is this topic of full freighters being attacked by belly cargo on passenger aircraft, a real thread? Of course there is the limitation on danger goods on passenger aircraft and much stricter security measures but how big is the market really that necessitates full freighters? Can still solely be blamed on the economic crisis or is there more going on that hasn't gotten the full attention (yet)?

If true, how can or are cargo carriers competing with this belly trend?

A388
 
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LAXintl
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 5:47 pm

Full freighters will always have a place. Something like 70% of air freight moves on full freighters today. Boeing says in its 2030 forecast this will be about 60% in 2030. A massive volume considering worlds GDP growth and growth of passenger airlines also.

But the push towards belly freight in recent years is really two fold. First aircraft like the 77W have great belly capacity and in essence are a mini-freighter themselves. Many airlines have seen very compelling cases when switching from the pax 744 to the 77W as they also gain so much cargo capacity with the model. When multiplied across a large network and number of flights flown on the 77W, the added belly space provides a huge volume often negating the need for freighters to supplement the passenger flights. As one CEO told me, why do they need many freighters when they have multiple 77W flying the route regardless.

Second one is cost, and the global economy. The world continues to see high fuel cost which requires full freighters to generate high enough yields and volume to cover their cost. Combined with the economic slowdown, world freight volumes have been in the anemic now for a few years. This puts pressure on yields, and add in complications like imbalances of freight lanes, the viability of making the full freighter work has been a struggle for some carriers.
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blueflyer
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 6:53 pm

An additional reason belly freight is attractive is the lack of dichotomy in the freight market compared to the passenger market. A freighter may be fully loaded one way and nearly empty on the return leg because trade isn't always bi-directional or even. It is less an issue with belly freight since most passengers fly round-trips, so the loss of a somewhat empty belly hold may be attenuated by full cabins above deck.

Full freighter will always have a place because there are trade lanes where belly hold is nowhere near enough capacity for the market, and there are still a lot of heavy and bulky items shipped by air that simply do not fit in the cargo hold of a passenger aircraft, but from a purely economic point of view, using passenger flights is always the cheaper and less risky option.
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pnwtraveler
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 7:41 pm

AC found that with the addition of the 77W and LR they could stop the wet leases of the MD11 and DC10 they were using. Previously they had used Combi 747's and before that DC8's. That was then followed by the economic slowdowns. For this specific case it lessened the need for dedicated freighters. Part of that was also the loss of the exclusive Canada Post contract which freed up belly cargo space as well. The tie-in with Purolator means that a lot of shipping volume can be combined on the aircraft used for the overnight business.

However that is not the overall trend. While we are still in a slump in volume, and things are uncertain in China, the situation is not very realistic for "normal" times. However, maybe unpredictable is the new normal. Most people think that shipments will rebound next year, and a key indicator will be what happens this fall and Christmas for time sensitive shipments. Many are "under" ordering now and planning to ship by rail and ocean. Many retailers are scared of being caught with too much overstock that would need to be liquidated. If things start bubbling, many retailers will need to augment stock with some last minute restocking and it will be by air.
 
rlwynn
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 7:55 pm

How about an A380 with People on the top and freight in the middle and bottom.
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mercure1
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 7:56 pm

I dont think anyone predict loss of need for full freighters. World GDP, trade grows so will need for air freight.

There simply is not enough passenger capacity to move so much air freight.

Also as security regulations grow, like some of proposals in US, it gets harder to ship on passenger flight, so freighters could by default get more business.
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A388
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 8:49 pm

Quoting mercure1 (Reply 5):
I dont think anyone predict loss of need for full freighters. World GDP, trade grows so will need for air freight.

There simply is not enough passenger capacity to move so much air freight.

Also as security regulations grow, like some of proposals in US, it gets harder to ship on passenger flight, so freighters could by default get more business.

I agree with you too and the other posts as well. Even so, there will be a debate about this subject at the Abu Dhabi conference. Also to be discussed is the improved cargo capabilities of the new generation widebody aircraft such as the 77W, 787 and A350. What I do think is the limitations of passenger flights over cargo flights and that certain will always require a full freighter. The question may be: Will this demand increase, decrease or remain stable in the coming 10-20 years.

Increased competition from the sea freight sector is a subject I also have heard several times now...

A388
 
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NWAROOSTER
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 9:06 pm

Ground shipment, including by sea, has gotten to be so reliable that shipping by air may be religated to time sensitive items or items of very high value.   
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777way
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 9:07 pm

Would Cargo codeshares on mulltistop freighter flights might help?
 
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Stitch
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 9:26 pm

Quoting A388 (Thread starter):
Brand new full freighters are being parked without starting commercial flying. Based on this I can imagine that full freighters may not be the most attractive solutions for air cargo now but at the same time there are still quite a few cargo carriers still flying cargo all over the world.

The 747-8 freighter is indeed seeing a number of deferred deliveries, however most of those deferred frames do appear to have delivery dates attached to them in the near-to-mid-term.

In addition to the rise in moving freight via belly cargo, there are also new medium-sized efficient freighters based on the 777 and the A330-200. The 777 freighter, especially, can directly replace a 747-200 freighter and can almost replace a 747-400 freighter. So cargo operators who would normally have replaced an old 747 freighter with a new 747 freighter might now consider the 777 freighter.

The 767-300 freighter has also enjoyed a sales boost as of late thanks to large orders placed by 5X and FX (and who will likely place additional large orders in the future).



Quoting rlwynn (Reply 4):
How about an A380 with People on the top and freight in the middle and bottom.

Such a plane would be difficult, if not impossible, to certify from an economic standpoint.
 
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Spacepope
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 9:30 pm

Quoting A388 (Reply 6):
Also to be discussed is the improved cargo capabilities of the new generation widebody aircraft such as the 77W, 787 and A350.

Indeed. I recently read an article that claimed the 77W carries an entire DC-8 freighter's worth of cargo in its belly holds. No idea if that was a short or long body DC-8 though.
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777way
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 9:33 pm

will their be 773 frieghters or conversions in future? can A346 be converted too.
 
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Stitch
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RE: Full Freighters Attractiveness?

Mon Jul 29, 2013 9:38 pm

Quoting 777way (Reply 11):
will their be 773 frieghters or conversions in future? can A346 be converted too.

The 777-300A is likely not going to make a very good general purpose freighter (FX and 5X might like it as a package freighter). The 777-300ER has the TOW and ZFW to make it a better freighter. There are also significantly more 777-300ERs, which improves the feed stock.

Airbus has kicked around the idea of an A340-600 passenger to freighter conversion, but I don't know what interest there is in such a conversion. The low number of frames built would impact the available feed stock, as well.

[Edited 2013-07-29 14:38:40]
 
PanHAM
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 7:10 am

Quoting Spacepope (Reply 10):
Indeed. I recently read an article that claimed the 77W carries an entire DC-8 freighter's worth of cargo in its belly holds. No idea if that was a short or long body DC-8 though.

must have been the short version, the 8 stretch could carry 47 tons and thats a bit too mmuch for the 77W

In general, all cargo carriers have a big problem when the econmy slides down. CV is fighting to stay and i wish them good luck, they are needed. They also show a good example of how the disparity of traffic flow can be intelligently met by routings that sometimes includes half a dozen stops before the aircraft hits home ground again. In shipping this is called "tramping".

The problem with belly freight vs freighters is, that some airlines still carry belly freight at any rate they can get as it is considered as a "fill-up" which makes additional revenue but doe snot cober all related costs. .
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SIA747Megatop
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 7:30 am

I find this thread very timely as I was recently reading the Singapore Airlines quarterly results. The airline's freighter division hasn't made a profit in years and the fleet has been constantly shrinking as the airline has sold/scrapped 4 out of their 13 freighter aircraft - bringing their full freighter fleet down to just 9 744Fs.



Their results also include the following statements:
"SIA Cargo’s load factor of 62.5% was marginally lower year-on-year as carriage (in load tonne-kilometres) fell 5.3%, more than the 4.8% reduction in cargo capacity (in capacity tonne-kilometres)."

"On the cargo front, demand is expected to remain depressed, in turn placing pressure on loads and yields."
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 8:13 am

Also consider that airlines flying belly freight often only take that as some additional income (even important one) but these rates often wouldn’t justify a standalone business / freighter operation.
So the yields in many of the main trades (Europe Asia and Asia USA) are pretty bad.
If you consider you can fly a kg freight from Europe to China for ~1 EUR and from China to Europe for below ~20 CNY and taken the seasonality and holiday periods in consideration - I doubt that’s a healthy business.

So IMO there will be freighters around but it will be much harder to make money with them than 10 years ago (just have a look at AF, ACG, SU ….)
 
PanHAM
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 8:13 am

Quoting SIA747Megatop (Reply 14):
"SIA Cargo’s load factor of 62.5% was marginally lower year-on-year as carriage

It is usually extremely difficult to get space on a freighter flight for examplke from Europe to Australia via SIN. The low load factor, whoich resembles that of LH, can be explained with the fact that the freight divisions "buy" the belly capacity of the passenger airline and while the long distance flights usually are packed, the short distance flights are not.
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HPRamper
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 12:49 pm

Quoting Spacepope (Reply 10):
I recently read an article that claimed the 77W carries an entire DC-8 freighter's worth of cargo in its belly holds.

I just read one that said a 77W has the volume capacity of a 757 in the belly. Weight wasn't mentioned.
 
A388
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 1:55 pm

Wow that a low load factor that SQ Cargo and LH Cargo have (62 percent?). Is that load factor indicative to all cargo carriers at the moment or are some doing well? I read an article that SV Cargo is doing well on their cargo flights from the Middle East to the U.K. and U.S.(?)

Cheers,

A388
 
PanHAM
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 2:14 pm

To clarify - LH's load factor overall is just under 70%, but that i ncludes the bellies of numerous European flights every day for which there is not always load available.

They are doing very well on the freigher flights.
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vfw614
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 2:35 pm

Quoting rlwynn (Reply 4):
How about an A380 with People on the top and freight in the middle and bottom.

Too heavy unless freight would be typical integrator-style stuff. Reason why the A380F was dscontinued was that it could only be used by integrators, but not general freight carriers. Its (limited) attractiveness was the volume.
 
A388
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 3:08 pm

Quoting PanHAM (Reply 19):
To clarify - LH's load factor overall is just under 70%, but that i ncludes the bellies of numerous European flights every day for which there is not always load available.

They are doing very well on the freigher flights.

Okay, thanks for the clarification. Isn't most of the cargo within Europe trucked using a "trucking flight number"? How do the passenger belly cargo tonnage compare to the trucking tonnage?

A388
 
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Revelation
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 3:36 pm

Quoting A388 (Reply 6):
Also to be discussed is the improved cargo capabilities of the new generation widebody aircraft such as the 77W, 787 and A350.


The replacement of 767 by A330 and B787 in pax service is certainly adding improved cargo capacities. That's why increased use of 767 by FedEx is interesting. It's kind of known for being awkward for cargo handling due to its need for special containers, yet FedEx is ordering them in droves. The current thread says this is because it is a good replacement for the older MD10s in terms of capacity and ground footprint. It can only help that they have one less engine and as factory new they don't have the maint issues of the MD10s. However it's interesting that they didn't decide to try to go with 767 pax conversions.
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 5:51 pm

Quoting Revelation (Reply 22):
That's why increased use of 767 by FedEx is interesting. It's kind of known for being awkward for cargo handling due to its need for special containers, yet FedEx is ordering them in droves.

Per HPRamper, FX is moving away from the AMJ containers currently used on the A300/A310/MD-10 in favor of a new container (I am guessing AAX) that can also be used on the 767-300 with the A300 and A310 converted to accommodate it. So they will be able to use the AAX on all of their widebodies and as they phase out the A306, A310 and MD-10 (likely for additional 767s), the AAX will become the primary small container for them with the AMJ for the MD-10, MD-11 and 777 fleets.

Per DHL, the AAX offers 14.3m3 of volume compared to the 16.8m3 of the AMJ. The 767-300F can handle 22 AAX, for a total of 314m3.

It has been reported on this forum that the FX MD-10 normally operates with 16 AMJ and 13 AYY (5.8m3) containers for a total of 314m3.

Per FX's Charter Page, it looks like the A310-200F fits 6 AMJ and 16 AYY for a total of 194m3.

Per a post by Teva in Airbus A300F ULD Dimensions (by Apuneger Oct 13 2004 in Tech Ops), the FX A306 has 9AMJ and 17 AYY for a total capacity of 250. This configuration is backed up by the FX A306 charter page.

So the 767-300F offers the same usable volume for FX as the MD-10 and more volume than the A300-600F and A310-200F (as well as the A310-300F). With the 767-300F, FX can simplify their fleet from four models to one, which is why I expect them to place additional orders down the road.


Quoting Revelation (Reply 22):
However it's interesting that they didn't decide to try to go with 767 pax conversions.

The new-builds may offer better value over a long-term ownership.

[Edited 2013-07-30 10:57:50]
 
LJ
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 6:28 pm

Quoting mercure1 (Reply 5):
I dont think anyone predict loss of need for full freighters. World GDP, trade grows so will need for air freight.
There simply is not enough passenger capacity to move so much air freight.

I agree. In addition, I doubt we'll see pax service to those small destinations currently served by the full freighters. Furthermore, full frieghters are more flexible as their schedule is more flexible, can operate with low frequency and operate at hours where it's best suited for cargo and not for the pax. Finally, not all cargo fit in a belly of an aircraft.
 
HPRamper
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 7:15 pm

Quoting Stitch (Reply 23):
Per HPRamper, FX is moving away from the AMJ containers currently used on the A300/A310/MD-10 in favor of a new container (I am guessing AAX) that can also be used on the 767-300 with the A300 and A310 converted to accommodate it. So they will be able to use the AAX on all of their widebodies and as they phase out the A306, A310 and MD-10 (likely for additional 767s), the AAX will become the primary small container for them with the AMJ for the MD-10, MD-11 and 777 fleets.

I actually do not think the A306 or MD10/11 will be converted. There would be simply too much wasted space as the new AAD containers have a smaller footprint than the current AMJ...and the MD10s will be phased out too quickly to make the conversions cost-effective anyway. The A310 will be gone quite quickly once more 767s come into the fleet. On this subject however, I do know that the A306/310 will have a smaller conversion done to accommodate the AWX haz containers that were formerly used exclusively on the 727.

Quoting Stitch (Reply 23):
So the 767-300F offers the same usable volume for FX as the MD-10 and more volume than the A300-600F and A310-200F (as well as the A310-300F). With the 767-300F, FX can simplify their fleet from four models to one, which is why I expect them to place additional orders down the road.

I still see the A306 staying in the fleet for some years. They are just too new to retire in the near-term. They will have a niche to serve in capacity between the 757 and the 767 although I think the difference in freight capacity is really minimal between the 767 and A306.

I think it would be fascinating if FX moved to segregate all of the A306 to one hub the way passenger airlines have different types at respective hubs, but I doubt that is in the cards.

[Edited 2013-07-30 12:56:50]
 
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Revelation
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 7:46 pm

Quoting Stitch (Reply 23):
So the 767-300F offers the same usable volume for FX as the MD-10 and more volume than the A300-600F and A310-200F (as well as the A310-300F). With the 767-300F, FX can simplify their fleet from four models to one, which is why I expect them to place additional orders down the road.

Interesting how they're moving from 727/A3xx/MDxx/777 to just 757/767/777. They've gotten rid of a lot of old planes and staffing in the last few years.

Quoting Stitch (Reply 23):
Quoting Revelation (Reply 22):
However it's interesting that they didn't decide to try to go with 767 pax conversions.

The new-builds may offer better value over a long-term ownership.

Indeed the trade-off is interesting but I'll stop before anyone asks about restarting the 757 line!  

BTW just saw that UA is transferring a bunch of 757 'feed stock' to FX...
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HPRamper
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 8:03 pm

Quoting Revelation (Reply 26):
Interesting how they're moving from 727/A3xx/MDxx/777 to just 757/767/777. They've gotten rid of a lot of old planes and staffing in the last few years.

Not quite so fast...the MD11F is sticking around for quite a while. FX even just took delivery of one last year I believe...even if that ends up being a spare for parts, that's not usually the action of an airline that is retiring the type in the near future.
 
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Stitch
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 8:19 pm

Quoting HPRamper (Reply 25):
I actually do not think the A306 or MD10/11 will be converted. There would be simply too much wasted space as the new AAD containers have a smaller footprint than the current AMJ...

Ah, so the AAD is the new 767 main deck ULD? It looks to have the same 88x125x96 inch dimensions of the AAX /A1. Is the volume the same at 507 cubic feet?
 
Viscount724
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 10:32 pm

Quoting LJ (Reply 24):
Finally, not all cargo fit in a belly of an aircraft.

Including this type of cargo.

 
HPRamper
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RE: Full Freighters Attractiveness?

Tue Jul 30, 2013 11:46 pm

Quoting Stitch (Reply 28):
Ah, so the AAD is the new 767 main deck ULD? It looks to have the same 88x125x96 inch dimensions of the AAX /A1. Is the volume the same at 507 cubic feet?

I'm not familiar with the AAX but I would think if the dimensions are the same, the volume will be as well. But yes the AAD will be the new main deck ULD and the bellies will use the new (to FX) LD-2.
 
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Stitch
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RE: Full Freighters Attractiveness?

Wed Jul 31, 2013 1:53 am

Quoting Viscount724 (Reply 29):
Including this type of cargo.

Looks like an HMA stall (HMA horse box on P6P pallet base).

Quoting HPRamper (Reply 30):
I'm not familiar with the AAX but I would think if the dimensions are the same, the volume will be as well. But yes the AAD will be the new main deck ULD and the bellies will use the new (to FX) LD-2.

Thanks!

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