The bottleneck in the supply of passenger-to-freighter aircraft comes at the conversion stage, with the availability of slots at most major conversion facilities booked up until 2024, and in some instances until 2026. googletag.defineSlot('/21776187881/FW_Super_Leaderboard', [[300, 50], [970, 90], [300, 100], [728, 90]], 'div-gpt-ad-1668097889433-0').defineSizeMapping(gptSizeMaps.banner2).addService(googletag.pubads()); Many also envision it as a replacement for the Boeing 757, a large narrowbody jet that is increasingly scarce and approaching the end of its life cycle. The number of passenger-to-freighter conversions has steadily increased at a 9% compound annual growth rate from 2010-21, driven by demand for standard-size freighters best suited for regional package networks. }); Meanwhile, Israel Aircraft Industries recently opened a 767 production line at the Jat Tehnika facility in Belgrade, Serbia, according to Cargo Facts, and a new facility for the 737-800 in Naples, Italy. As a conversion house that has redelivered over 400 aircraft through its Passenger-to-Freighter (P2F) programmes since 1996, ST Engineering is today one of the world's largest and most experienced solution providers for freighter conversion. DHL Express has firm orders for eight A330-300P2F units in total, with additional options to receive another 10. In recent The result is that the A321P2F is well positioned against any competing narrowbody passenger-to-freighter conversion programme and aircraft type. The average conversion cost for the Boeing 767-300ER is US$14.7 million, compared to US$18.4 million for the A330-300. Click here for more FreightWaves/American Shipper stories by Eric Kulisch. Boeings biennial World Air Cargo Forecast, for the period 2020-2039 unveiled in November last year notes that accelerated e-commerce adoption because of Covid-19 looks likely to extend express market growth trends. T.C. While no figures are officially available, IBA estimates the conversion cost of a 2005-built 777-300ER to be around $32.5 million. The design will make use of the existing B777-300ER passenger airframe, which is now the most popular widebody aircraft variant in history. Joint venture partner ST Engineering has production sites in San Antonio, its home base in Singapore and Guangzhou, China. Formed in 1958, Aeronautical Engineers Inc. (AEI) is the oldest conversion company in existence today. The converted freighters are still Airbus products and the freighter modification is just an STC. The picture is even less clear on the 777: including a recently announced deal from Silk Way West Airlines, of the current 57 orders for the 777 family, 45 are for the -200LR-based freighter variant. Based on this source, an A330-300's heavy (D) check costs 3.8 million USD (adjusted for inflation from 2010 to 2018), and given the quoted conversion for the A333, it's ~4 times as much to do the conversion. How much does a D-check cost compared to a new aircraft? Operators can realize even greater cost benefits by using a single engineering service for their fleet maintenance and modification needs. In such cases upgrade requests are closely coordinated with EFWs and Airbus Upgrade Services teams, with EFW acting as the MRO to install any required Service Bulletin (SB) kits as part of its additional services for the customer. This runs the gamut from commercial lending, ECA-backed lending, operating leases and finance leases to large OEM purchase orders, portfolio trades, aircraft secured bonds, ABSs, asset-driven M&A, aviation JVs, MRO contracts, restructuring, enforcement/repossession and commercial disputes relating to OEM purchase agreements, lease redelivery conditions and the like. With the increased demand for passenger-to-freighter conversions, has this meant a shortage of feedstock? EFW has orders for more than 100 P2F conversions for the A330-200 and -300. As such, there appears to be a demand/supply equilibrium currently in terms of aircraft available for conversion. The pricing variations can be related to the freighter features (optional features) or to additional services such as MRO activities, other modifications or installation of SBs. The prototype A321P2F ("Passenger-to-Freighter" conversion) aircraft . Cargo conversion for their own cargo unit might speed up LH getting rid of their 747-8i fleet 10-15 years from now. IAI and GECAS are partnered on 777-300ER modification programme. 2021 is looking to be an even stronger year for the type, it says, with nearly 40 aircraft pending. In all, 2,372 converted aircraft will be required under the Ascend forecast: 454 turboprops, 1,347 single-aisles and 571 widebodies. By Mike Bryant. Connect and share knowledge within a single location that is structured and easy to search. Demand in the freighter sector has sparked interest from lessors; airlines; maintenance, repair, and overhaul (MRO) service providers; investors; funds; and other financial institutions. Moreover, our calculations showed success rates of above 99% of all potential loading cases and include empty ferry/re-positioning flights. EFW has its own AOG service 24/7. Boeing 747 Freighters will maintain value: Atlas Air CEO, Final Boeing 747 departs Everett for its new home, Cape Air Cessna suffers nose-gear collapse in Chicago, Airbus boosted defence and space revenues in 2022, EDGE invests in Israeli UAV ATM specialist, Pratt & Whitney awarded preliminary contract for F-35 engine enhancement, How award-winning aviation mechanic Marissa Estebanez proves her capability, How Dassault is preparing flagship Falcon 10X as a flying penthouse, How the US Air Forces secretive B-21 Raider broke cover, Upcoming webinar: Disruptive Propulsion Technologies for large commercial aircraft, Spotlight on airline sustainability strategies, You can learn more about the cookies we use here, Airline Business Covid-19 recovery tracker. Typically the RJ100 can be bought for between $1.5m and the freighter kit and conversion would cost between $2.2 and 2.8m. googletag.cmd.push(function() { Learn more about Stack Overflow the company, and our products. Please select at least one category to subscribe to. It is available with specially designed blended winglets to further improve efficiency, and can travel up to 1,995 NM even with a full load. Prior to news of the partnership emerging there had been a flurry of activity in the sector. If the cost of the conversion is more than the proposed price to sell the aircraft, the owner selling the P2F converted aircraft will incur a loss. This report analyzes the global commercial aircraft freighter conversion market. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. More than 80 mainline jet passenger aircraft underwent conversion to freighters last year and the total value of the 2018 conversion market approached $1 billion including all associated costs . The 757 continues to dominate the larger narrowbody space, says IBA; an additional 20 examples are pending conversion having been retired from passenger roles, it says, adding to the 298 units in operation as freighters at February 2021. "Conversely, passenger aircraft utilisation fell from over 2.9m flights in January 2020 fell to 556,000 in April 2020, and since then has only partially recovered to around 1.5m flights in January 2021." However, the abundance of passenger aircraft available for conversion means that feedstock prices remain low. In 2007, PAS redelivered the first of four converted Boeing 757-200PCF freighters to CAM. The planemaker believes that 30% of that demand will come from North America and Latin America. googletag.pubads().collapseEmptyDivs(); Over the last three decades, some 50 to 70 passenger-to-freighter conversions took place each year, aerospace consultancy AeroDynamic Advisory wrote in a LinkedIn post on March 3. Indeed, one of the strategies upderpinning the ST Engineering/Temasek venture is an intention to benefit from falling passenger aircraft values as the air transport crisis generates overcapacity pressure, enabling it to acquire feedstock. This is thanks to its 14 full size 88inch x 125inch main deck positions plus another 10 lower deck AKH container positions. EFW has delivered 16 passenger-to-freighter conversions of single-aisle aircraft, including one A320 a slightly smaller sister to the A321 so far. EFW has secured new orders for converted A321. The all-in price, including aircraft acquisition, is closer to $54.5 million. Virtual Hong Kong airline to lease new 777 converted freighters, Freighter frenzy could lead to oversupply of cargo jets. Industry watchers also suggest the partners involved, together with the support of engine provider GE Aviation, lend credibility to the effort, despite the engineering challenges involved. (Useful to have an idea of D-check costs.). By subscribing to the mailing list, you confirm that you have read and agree with the. Thanks for contributing an answer to Aviation Stack Exchange! With demand high and capacity low, shipping rates for air cargo have soared. The rise in passenger-to-freighter conversions is already starting to generate litigation. San Diego, California, Wednesday October 16th, 2019. In the vast majority of conversions, such heavy maintenance activities can be performed without having an impact on the normal conversion layover if they are carefully planned in advance and if there are no major findings. The strength of the A321 is clearly its capability to accommodate fully containerised cargo on both decks a game-changer in this freighter size segment, and something which is not available on competing freighter platforms up to the B757. CTKs have climbed consistently over the last 12 months, save for the annual post-Christmas slump. Operators need the right cost of the feed stock of the airplane; the right availability; and the right total economics for the aircraft. Last year, the company finished 19 conversions of the A320/321 and the larger A330 family. How much does it cost if someone falls ill before take-off? In addition, the A321s Doors 4 L/R are removed and re-skinned, which is necessary to accommodate a 14thfull-size container position without limitation. In turn, the new lavatory is located on the right-hand side. When the pandemic pulled the plug on global air travel in 2020, the aviation industry was left reeling. Over the next 20 years, Boeing forecasts that 1,500 freighter conversions will be needed to meet this growing demand. . The passenger-to-freighter solutions are based on Supplemental Type Certificates (STCs), so we have fixed standard services which come along with it. Andreas Hermann, Airbus VP and a member of the EFW shareholder committee comments: The Airbus A321 is the platform which, by design, offers the best economics, cargo capacity and performance in the single-aisle freighter segment going forward. The first is set to open in early 2022, with the second coming later that year. In IBAs view, the 737 will continue as the mainstay of the smaller narrowbody market, with conversion activity shifting to the -800 as feedstock availability of earlier 737 Classics dries up. googletag.defineSlot('/21776187881/fw-responsive-main_content-slot2', [[728, 90], [468, 60], [320, 50], [300, 100]], 'div-gpt-ad-1665767737710-0').defineSizeMapping(gptSizeMaps.banner1).addService(googletag.pubads()); Ethan Tanis an experienced aviation lawyer with deep expertise in aviation finance as well as all varieties of aviation-related work. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. This email cannot be added to this list. We also highlight the A320 Familys unique cargo belly hold (ie lower deck) which allows for mixed-fleet operation and interlining between Airbus single-aisle passenger aircraft and freighters, which is a significant operational and commercial advantage for airlines. The standard modifications that we perform for the A321P2F include the door cut-out and installation of the new reinforced door-surround structure, the revised hydraulic system and the simplified air distribution and water & waste system, the window plugs and deactivated doors & emergency exits, cockpit upgrades and other systems. T.C. All 24 of these aircraft are powered by Rolls-Royce RB211-535 engines, making this fleet the narrow-body freighter of choice due to its attractive payload, range and cost of ownership characteristics. How much does a Hundred Dollar Hamburger actually cost? Some advantages of our A320/A321P2F solution include: In contrast to other solutions providers who rely on reverse engineering, our Airbus P2F programmes are developed using OEM technical data to convert passenger aircraft into well-optimised and reliable freighter workhorse. Quite a number of cargo airlines choose to operate a first-hand quality converted freighter. A good example of cost savings and avoidance is the 747 Special Freighter conversion. low maintenance costs. 321 Precision, a joint venture that includes cargo leasing and airline services conglomerate Air Transport Services Group, also has production partners in the U.S. window.googletag = window.googletag || {cmd: []}; Conversion costs vary depending on the model of aircraft, but data from aviation analytics firm IBA shows that narrowbody conversions typically cost somewhere in the $4-6 million range, while widebody P2Fs can cost as much as $18 million. We provide news, data, analytics and advisory services to connect the aviation community globally and help organisations shape their business strategies, identify new opportunities and make better decisions faster. We recommend that customers assign heavy checks to the modification site (ST Engineering and EFW) in conjunction with the P2F conversion. Aviation Stack Exchange is a question and answer site for aircraft pilots, mechanics, and enthusiasts. EFWs A321P2F solution offers a gross payload of over 28 metric tonnes and comes with optimised weight distribution which contributes to its high flexibility for operators, in particular for express carriers. "We estimate that most slots are sold for 2021 and. The solution was audited and approved by the French OSAC, the UAE GCAA and the Chinese CAAC with feedback highlighting the quality of the solution and of the instruction. googletag.defineSlot('/21776187881/fw-responsive-main_content-slot3', [[728, 90], [468, 60], [320, 50], [300, 100]], 'div-gpt-ad-1665767553440-0').defineSizeMapping(gptSizeMaps.banner1).addService(googletag.pubads()); T.C. Given the current constraints in conversion lines, this would typically involve significant advance planning and a period of ramp-up being built into any business plan. Adding only $29 million for conversion and $5.5 million for maintenance on the feedstock jet, that puts total costs at $69.5-74.5 million for the converted jets. Through our joint venture with Airbus, Elbe Flugzeugwerke, we are one of the worlds largest and most experienced solution providers for freighter conversion, and have redelivered over 400 aircraft through our Passenger-to-Freighter programmes since 1996. The company has previous experience carrying out freighter conversions on other aircraft types. is there a chinese version of ex. We are convinced that the significant benefits of operating containers in the bellies of Airbus A321P2Fs will enhance the quality of service, especially since containers provide protection for sensitive goods under all environmental conditions such as rain, snow and heat. Authors: Simon G. Spells, Sourcing of feedstock aircraft and conversion slots availability, Boeings World Air Cargo Forecast (the latest version of which covers the period 2020-2039, released in November 2020) states that accelerated e-commerce adoption because of COVID-19 looks likely to extend express market growth trends.. Later in the year, CAM will begin the passenger-to-freighter conversions of our first A330-300 for lease delivery in 2024. }); Leasing companies and airlines dont appear concerned about oversaturating the air cargo market with freighters as they continue to place production orders despite a yearlong downturn in air cargo volumes and rates. AEI currently offers passenger-to-freighter conversions for the Boeing 737-400, 737-300, 737-200 and MD-80 aircraft. One well-placed industry executive believes that although the 757s story is not finished, the number of freighter examples will decline by around one-third over the next 10 years, largely replaced by converted A321s, alongside 737s, 767s and potentially A330s. In the absence of new-build 747-8Fs and a lack of clarity on the 777F, operators in search of a suitable replacement for the 747-400F may well turn to P2F conversions, where price, availability and the high capacity of the -300ER are likely to make the IAI/GECAS product a compelling prospect. Nevertheless, there can still be some unavoidable differences between candidate feedstock aircraft, for example if the new P2F fleet is being created from six A321s purchased from airline X and four A321s purchased from airline Y which will likely comprise aircraft originally from different production batches. 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