JUPITER SEA & AIR SERVICES PVT. LTD, EGMORE – CHENNAI, INDIA.

 

E-MAIL : Robert.sands@jupiterseaair.co.in   Mobile : +91 98407 85202

 

 

Corporate News Letter for  Saturday  July  25,  2026

Today’s Exchange Rates

CURRENCY▲	PRICE	CHANGE	%CHANGE	OPEN	PREV.CLOSE
USD/INR	96.56	0.020004	0.020713	96.64	96.58
EUR/USD	1.1365	-0.0012	-0.105473	1.1377	1.1377
GBP/INR	128.6018	-0.520096	-0.402794	128.6453	129.1219
EUR/INR	109.9707	-0.2341	-0.212423	109.9707	110.2048
USD/JPY	163.791	-0.069	-0.042109	163.86	163.86
GBP/USD	1.3319	0.0004	0.030037	1.3315	1.3315
JPY/INR	0.5899	0.0005	0.084836	0.5893	0.5894

///                   Sea Cargo News            ///

India Faces Shipping Risks from Houthi Saudi Embargo

The Houthis' announcement of a maritime embargo targeting Saudi Arabia has raised fresh concerns for India's shipping and trade sectors, with industry stakeholders warning of potential disruptions to cargo movements, higher freight costs, and increased operational risks across key regional sea lanes.

Although the full scope of the embargo remains uncertain, any escalation in attacks or restrictions on vessels linked to Saudi Arabia could affect shipping routes through the Red Sea and adjoining waters. These waterways are critical for global energy supplies and container trade connecting Asia with Europe and the Middle East.

For India, the development poses risks to imports of crude oil, petrochemicals, fertilizers and other commodities sourced from the Gulf region, while exporters could face longer transit times, higher insurance premiums and increased freight rates if vessels are forced to alter their routes or adopt enhanced security measures.

Shipping companies are closely monitoring the security situation and may reassess voyage plans depending on the evolving threat environment. Insurers are also expected to review war-risk premiums for ships operating in affected waters, adding to overall logistics costs.

Despite the heightened uncertainty, maritime trade with Saudi Arabia continues and industry experts note that the actual impact on Indian trade will depend on the intensity and duration of the security situation.

Authorities and shipping stakeholders are expected to remain vigilant while working to ensure the uninterrupted movement of cargo through one of the world’s most strategically important maritime corridors.

Andhra Pradesh Begins Land Acquisition for Phase II of Mulapeta Port

The Andhra Pradesh government has initiated preparations for land acquisition for the second phase of the Mulapeta Port project in Santabommali mandal of Srikakulam district, with revenue authorities identifying suitable land parcels for the expansion.

The first phase of the ₹4,362-crore deep-sea greenfield port, formerly known as Bhavanapadu Port, is more than 80 per cent complete. Construction of the road connecting the port to National Highway-16 is also progressing rapidly, and the facility is expected to become operational by November this year.

Designed with an 18-metre draft, Mulapeta Port will feature four berths—three for general cargo and one dedicated to coal handling. The port will be capable of accommodating Panamax and Capesize vessels and is planned to handle 23.5 million tonnes of cargo annually.

In a significant development, the Central Government recently approved the transfer of 385 acres of Naupada Salt lands to the Andhra Pradesh Maritime Board, enabling direct road and rail connectivity to NH-16. Dredging works have been completed, while over 92% of the breakwater construction is already finished.

///                   Air Cargo News            ///

Challenge Group tests 2nd B777-300ERSF

Challenge Group, an all-cargo carrier holding three air operator certificates (AOCs), has completed the post-conversion test flight of its second Boeing 777-300ERSF, marking another milestone in its fleet expansion built around Israel Aerospace Industries’ (IAI) passenger-to-freighter conversion programme, known as the Big Twin.

The aircraft follows Challenge Group's first 777-300ERSF, registered 9H-CAZ, entered service in February 2026 under the group's Maltese subsidiary, Challenge Airlines MT. That delivery made Challenge Group the first operator of a Boeing 777-300ERSF under an EASA-region air operator certificate.

The second aircraft is expected to enter service shortly. IAI is carrying out the conversions at its Tel Aviv facility under its 777-300ERSF programme. Each converted aircraft can carry close to 100 tonnes of cargo and is designed for high-volume, complex freight, including pharmaceuticals, live animals, dangerous goods, and oversized shipments.

Challenge Group’s 777-300ERSF pipeline extends well beyond the two aircraft already converted. Its passenger-to-freighter fleet build-up, launched in May 2025, includes four firm orders with options for four more.

In January 2025, the group signed a deal with lessor AerCap for two pre-converted 777-300ERSFs, and in October 2025 it entered into an ACMI agreement with Kalitta Air to operate an additional aircraft. Challenge Group has acquired five former Jet Airways Boeing 777-300ERs as feedstock for freighter conversions, investing over $107 million across two purchase tranches.

The latest two aircraft were secured in April 2026 for $61 million via India’s insolvency process and e-auction, bringing the total acquisitions to five. Parked since Jet Airways’ collapse in April 2019, the aircraft are awaiting deregistration and return-to-service clearance from the Directorate General of Civil Aviation (DGCA) before being ferried to IAI’s Tel Aviv facility for conversion.

Challenge Group to eventually operate eight Boeing 777-300ERSFs. At present, the group’s operational fleet totals 10 aircraft, comprising five 747s, four 767s, and one 777-300ERSF, with one 747 currently parked. The future fleet of 18 aircraft includes the five former Jet Airways 777-300ERs acquired for the ‘Big Twin’ passenger-to-freighter programme — three parked in Mumbai and two in Delhi — alongside the second 777-300ERSF now undergoing test flights and a third to be operated under an ACMI agreement with Kalitta Air.

These acquisitions form part of the group’s broader fleet modernisation and growth strategy, aimed at strengthening global trade connectivity and delivering integrated logistics solutions. Challenge Group traces its roots to 1976, when it was founded as CAL Cargo Airlines in Israel to transport agricultural exports to Europe.

Chairman Offer Gilboa acquired the business in 2010, restructured it, and rebranded it as Challenge Group in 2020. Its Israeli airline arm was renamed Challenge Airlines IL in 2022. The group now operates three airlines across Israel, Belgium, and Malta, alongside ground handling, road feeder, leasing, and maintenance divisions.

Air cargo's capacity squeeze runs to 2030

Manufacturer delays at Boeing and Airbus are rippling straight into air cargo capacity and the pain will not ease before 2030, according to Flexport and Atlas Air Worldwide executives speaking on a webinar titled "The capacity squeeze nobody budgets for: air cargo 2026–2030."

David Grinevald, director of air freight at Flexport, and Richard Broekman, chief commercial officer and head of sustainability at Atlas Air Worldwide, laid out how a stalled aircraft production pipeline is compressing widebody belly space, drying up the passenger-to-freighter (P2F) conversion queue, and pushing up rates, with shippers set to absorb the fallout through the end of the decade.

A 17,000-aircraft backlog Grinevald opened with the scale of the industrial shortfall: the industry is sitting on over 17,000 unfilled aircraft orders, a backlog that will take more than 12 years to clear. Global aircraft production finished 2025 some 24% below 2019 levels; a production shortfall of roughly 6,000 aircraft industry-wide, with fleet growth through 2036 now lagging pre-pandemic projections by six years.

Airbus is targeting 11 A350s a month by 2027 but is currently building five; Boeing was targeting five widebodies a month, including freighters, but is producing two, with the 777X still unapproved by the Federal Aviation Administration (FAA). Boeing and Airbus together account for roughly 80% of aircraft entering circulation, Grinevald noted, meaning their combined delays have no near-term workaround.

Broekman said the constraint is being felt directly on the airline side. "The biggest challenge for us is indeed access to additional capacity," he said, noting Atlas operates close to 15% of the global widebody freighter fleet. This year marks the first in many years that Atlas has not added aircraft to its fleet — "just really a function of no availability out there," he said.

Certification limbo and a broken supplier On the Boeing side, Grinevald pointed to the 737 MAX groundings that followed two fatal crashes, after which the FAA tightened its grip on Boeing certification programmes. The result: a seven-year slip on the 777X, now in its fifth year of certification with no clear end date, alongside the 737 MAX 7 and MAX 10 — together representing 14–24% of Boeing's order book, Grinevald said.

Airbus's delay traces to a different root cause: Spirit AeroSystems, a key fuselage supplier to both manufacturers that became financially dependent on Boeing and fell into distress after Boeing's own troubles. Airbus warned customers as of May 2026 of further A350 delays tied to Spirit's production problems.

Both the A350 and 777 are now delayed past 2027. Smaller manufacturers won't fill the gap, Broekman said. Moving global trade "really relies on the large widebody aircraft," he said, and even medium-widebody freighters carrying 50–60 tonnes "are just not as competitive" on a per-kilo basis.

A new entrant, he added, "would struggle tremendously to enter into this space" without an existing global supply chain. Atlas hedges with a $7 billion Airbus order Atlas has made two moves in the past 18 months that Grinevald called directly illustrative of the squeeze: acquiring a 49% stake in Air Atlanta Icelandic, which brings 14 widebody aircraft into the fold, and placing a $7 billion order for 20 Airbus A350Fs in March — Atlas's first Airbus commitment after operating as an exclusive Boeing customer.

"We know there's going to be a tremendous shortage of widebody freighter capacity," Broekman said, citing steady general freight demand, sustained growth in cross-border e-commerce out of China, and a newer driver — the buildup of hyperscaler and data-centre infrastructure powering the AI industry. Atlas evaluated both Boeing and Airbus options before choosing Airbus based on fit with current customers and earlier availability, though Broekman said future Boeing orders "are not out of the question."

The Air Atlanta stake, meanwhile, extends Atlas's network into Africa and Europe-Asia lanes where its partner is strongest. The conversion pipeline is drying up The P2F conversion cycle — airlines retire older widebodies, conversion shops retrofit them, freighters enter the market, is the industry's main source of new dedicated freighter capacity. But because airlines can't retire aircraft they haven't yet replaced, that replacement cycle is now roughly six years late, Grinevald said. The conversion backlog dropped to about 320 units in 2025, and some aircraft are returning to passenger service rather than converting, a trend Grinevald called new.

The forecast conversion volumes are stark: 80–95 P2F conversions a year between 2026 and 2029, dropping to 67 in 2030, 54 in 2031, 27 in 2032, and just four aircraft in 2034. Conversions will account for only 3.4% of the global cargo fleet over the next decade, Grinevald said. This means the freighter fleet in 2036 will still be dominated by aircraft built well before that.

An $11 billion bill — and rising The supply chain crisis is costing airlines more than $11 billion in 2025, according to IATA estimates cited on the webinar: $4.2 billion in excess fuel cost from flying older, less efficient aircraft; $3.1 billion in additional maintenance; $2.6 billion in engine leasing premiums as new deliveries run late; and further costs from spare-parts stockpiling.

Fuel represents at least 40% of freighter operating costs, Broekman said: "so if 40% of your cost suddenly doubles overnight, that has to be reflected in market rates as well." MRO (maintenance, repair and overhaul) spend will nearly double between 2019 and 2036, with 75% of MRO survey respondents reporting longer engine turnaround times over the past year. MRO EBITDA multiples have climbed to 15x, Grinevald said.

"The market is pricing in sustained scarcity." Belly capacity adds another layer of pressure: roughly 50% of global airfreight currently moves on passenger-aircraft bellies, down slightly from a pre-Covid split closer to 55/45 in favour of belly. "Shortage on belly just compounds the shortage of overall capacity," Broekman said, since freighters are already generally full. AOGs, transparency and a shipper playbook Both executives pointed to aircraft-on-ground (AOG) events.

According to them, this is now more frequent, given an aging fleet and higher utilisation as a growing source of schedule disruption. Grinevald described Flexport's digitised SOP system for tracking customer constraints during disruptions, while Broekman pointed to Atlas's tracking tools that let forwarders monitor aircraft status directly. "AOGs are a fact of life," Broekman said. "They're very frustrating because they always happen at the wrong time."

The session closed with a practical framework for shippers navigating the 2026–2030 window. Start by segmenting cargo by criticality: time-critical freight with no mode substitute needs a named carrier and an allocation contract, plus a contingency routing plan for AOG events. Freight that can absorb 48–72 hours of delay can run on spot or spot-adjacent capacity, backed by buffer stock at destination.

Freight that can downgrade should be flagged for fast-ocean options. Weighing allocation against spot is the real trade-off. Spot cargo is cheaper when the market is loose, but it's first to be bumped when disruption hits. Allocation contracts carry a premium but they guarantee space, lower bump risk, and priority loading.

"Premium is an insurance," Grinevald said. "It doesn't mean it will work every single time, but it will most definitely give you more certainty." Shippers should also ask harder questions in Request for Proposal (RFPs) and Quarterly Business Reviews (QBRs). What percentage of lane capacity is belly versus dedicated freighter? What's the contingency plan if freighters go AOG? What's the average overbooking rate in peak weeks?

How far in advance can allocation be guaranteed and which specific aircraft are in the freighter fleet? Grinevald, who previously worked on the shipper side, said that last question is rarely asked in tenders today.

I hope you have enjoyed reading the above news letter.                                                    

Robert Sands

Joint Managing Director

Jupiter Sea & Air Services Pvt Ltd

Casa Blanca, 3rd Floor

11, Casa Major Road, Egmore

Chennai – 600 008. India.

GST Number : 33AAACJ2686E1ZS.

Tel : + 91 44 2819 0171 / 3734 / 4041

Fax : + 91 44 2819 0735

Mobile : + 91 98407 85202

E-mail : robert.sands@jupiterseaair.co.in

Website : www.jupiterseaair.com 1Branches  : Chennai, Bangalore, Mumbai, Coimbatore, Tirupur and Tuticorin.

Associate Offices : New Delhi, Kolkatta, Cochin & Hyderabad.

 

Thanks  to  :  Container  News,  Indian Seatrade, Cargo Forwarder Global  &  Air Cargo News.