Bleaker economy could sour airline industry's bet on cargo planes

The airline industry's record-breaking scramble to convert older passenger jets to freighters during the travel-starved years of the coronavirus pandemic threatens to bring a glut of cargo space as a dimming global economic picture hits demand. Analysts say aircraft lessors, who helped drive a tripling in annual conversions since 2019, now face not only fallout from falling rates for cargo and freighter leases, but could get stuck with excess freighters or be forced to cancel conversions. "This surge in conversions has raised some concerns about a bubble," said Chris Seymour, the head of market analysis for aviation advisory group Ascend by Cirium, who fears there could be a slowdown by the middle of the decade. AirAsia, Air Canada, Qantas Airways and Vietnam Airlines are among the carriers adding freighters to their fleets in their bids to diversify sources of revenue. But cargo rates have fallen nearly 40% from December's record, with shipping giant FedEx Corp saying a global demand slowdown is set to worsen after an acceleration at the end of August, clouding the peak year-end shipping season. The rapid economic downturn and growing pessimism are a swift reversal from pandemic expectations, when falling aircraft values, combined with a surge in cargo demand, drove lessors and airlines to give used planes new life as dedicated freighters.<br/>