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Currency converters

Transforming a passenger aircraft into a freighter may not be easy, but the investment can pay real dividends. Bernie Baldwin reports on some of the conversion programmes available

‘Best bang for the buck’ is a term which can be readily applied to the business of converting passenger aircraft into cargo aircraft, whether the latter ends up as a pure freighter or a combi with a mix of seats and cargo space. The value of taking an aircraft towards the end of its usefulness in transporting passengers and giving it a new lease (sometimes literally) of life can be considerable.

In its White Paper on Freighter Conversions published in August 2017, leading consultancy IBA notes that cargo conversion is “the most technically complex route to freighter acquisition” but that “it also offers the greatest potential return”.

With the world’s economy still on a steady climb 10 years after the global financial crisis, the amount of cargo on the move is also on an upswing. Little wonder then, as IBA points out, that in its Current Market Outlook 2017-2036, Boeing forecasts a need for 2,480 additional freighters (1,560 conversions and 920 new) over the period, while Airbus in its Global Market Forecast 2017-2036 predicts a requirement for 1,950 freighters (1,218 conversions and 732 new).

“Current market conditions still favour older generation aircraft, feedstock is still available for the short term and fuel prices are low,” IBA’s White Paper states. “However, the market is facing a transition to new generation converted freighters for the long term and IBA expects an acceleration for replacement and growth from 2020, but not before, due to current high market value of new generation feedstock aircraft for conversion.”

The consultancy believes that the optimal price for 737-800 feedstock is around $11 million. Although conversions of the type have already been carried out, IBA expects the aforementioned price to “become more available in 24-36 months [from August 2017], with an acceleration for replacement and growth from 2020 onwards”.

The Boeing 737 is one of the types featured in the conversion programmes of Aeronautical Engineers, Inc (AEI), along with Bombardier CRJ100/200s and McDonnell Douglas MD-80s. On the manner in which the market is going for the 737-800, the company’s Senior Vice President of Sales and Marketing, Robert Convey, has a similar view to IBA.

“We are entering a transition period for the narrowbody freighter fleet as the Boeing 737-400SF runs out of feedstock and the 737-800SF [AEI’s brand for the converted aircraft] begins to enter service,” Convey comments. “By the time the -400SF has run its course there will be an estimated 200 units converted, over 150 being AEI conversions. These will need to be replaced, starting in early 2020 and the -800SF is the right sized freighter to take its place. When you factor in growth, we could be looking at 500-plus 737-800SF conversions over the next 20 years.”

Assessing AEI’s other programmes, Convey adds, “The conversion of 737-300SFs has dramatically slowed and will come to a complete stop in the next few years. AEI’s MD-80SF is showing signs of continued interest with over 10 conversions booked in one recent month. This programme will produce between 40 and 50 freighters.

“The CRJ is just getting going and we are seeing a strong demand from all parts of the world for the freighter. We are looking at the CRJ700 and CRJ900 but for the moment both are too expensive,” he observes.

Deliveries from AEI’s CRJ100SF/CRJ200SF conversion programme only began at the end of 2016 when the company – which is a Bombardier-licensed third party STC provider – handed over the first aircraft to launch operator IFL Group of Waterford, MI.

The freighter design includes a large 94in x 77in (238.7cm x 195.6cm) cargo door, which can hold up to 14,840lb (6,731kg) of payload on the main deck and offer eight 61.5in x 88in pallet positions for containerisation.

On the technical front for these conversions, AEI “uses the same baseline design which has proven to be extremely reliable over the past 60 years,” according to Convey. “The differences in the installation come in the form of different structural designs from the OEM. Boeing, McDonnell Douglas and Bombardier have unique ways of designing their structure and the challenge comes during the development phase when we adapt our modification.”

Alongside AEI’s programme in the 737-800 conversion market is the airframer’s own, the initial example of which has just been delivered. GE Capital Aviation Services was the recipient recently of the first 737-800 Boeing Converted Freighter (BCF). The aircraft is being operated by West Atlantic Group, based in Sweden, and is the first of four 737-800BCFs which the carrier will receive over an 11 month period from first delivery until early 2019. At that time, West Atlantic will operate 23 Boeing 737 freighters.

Boeing claims that the 737-800BCF ‘carries more payload – up to 23.9 tonnes (52,800lbs) – and has longer range – 2,000 nautical miles (3,750km) than other standard-body freighters. Twelve pallet positions provide 4,993ft3 (141.4m3) of cargo space on the main deck. This will be supplemented by two lower-lobe compartments, combined providing more than 1,540ft3 (43.7m3) of space for revenuegenerating cargo’. So far the OEM has received 45 orders and commitments for the 737-800BCF from seven customers.

Staying with the 737NG family, the first delivery from Pemco World Air Services’ 737-700 FlexCombi conversion is due soon. The company is expecting to receive the Supplemental Type Certificate (STC) for the aircraft during this second quarter of 2018. It is then scheduled to deliver the freighter to launch customer, Chisholm Enterprises of Bahrain, early in the third quarter of the year. Chisholm’s subsidiary Texel Air will be the eventual operator. Chisholm has just this one 737-700FC on firm order though it is also one of the types on option. >>


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