IAI take charge on conversions

IAI 767-300 take off

Last October, Israel Aerospace Industries (IAI) opened a new chapter with the launch of a programme to give the B777 a second life in cargo. Fast-forward to the same time in 2020, and the company has faced more demand than ever with the consequences of the coronavirus pandemic.

As passenger flights were cancelled across the globe and airlines scrambled to find ways of operating in a changed environment, IAI found that it had the solution with its conversion business.

“From January and February this year, we found there was a lot of interest from leasing companies and airlines, which wasn’t very usual, and the reason was because a lot of passenger aircraft were grounded,” says Israel Aerospace Industries’ Aviation Group vice-president of marketing, Rafi Matalon.

During the pandemic, airlines and lessors were forced to find new ways of using the aircraft to cover expenses when passengers were unable to take to the skies, one of which was converting them to carry cargo.

“Lessors couldn’t let aircraft for another cycle, and airlines that were divided into two sides, passenger and cargo found that having more [cargo aircraft] would cover expenses since passengers weren’t flying,” added Matalon.

“Airlines that were purely for passengers also came to the conclusion that having freighters may reduce the risk in cases such as the pandemic. So there is a big demand and we have been adjusting ourselves to that demand.”

Increasing demand

To cope with the increase in demand, IAI has increased additional conversion lines for the Boeing 767 to eight and is looking to increase capacity for other aircraft.

737-700 during conversion at IAI

“In Israel, right now, we’re running six conversion lines, and we’ve added another two conversion lines in a remote site in Mexico, making it eight for the 767.”

For the 737, it is converting remotely with two sites in China and an additional one in Mexico, as well as being “well into the process” to evaluate demand and add an additional line in Europe.

Taking four months to convert the 767 and three for the 737, it is clear that with its choices to increase conversion lines, the company is able to keep up with the fierce demand caused by the virus.

In fact, the phasing out of the 747 has been halted as requests for the aircraft pick up again.

“Demand has risen for the 747, and we’re the only company that kept the conversion line. In the last three years, it’s been phased out because we didn’t have any interest,” explains Matalon.

“But since Covid, we’ve had a lot of interest. I hope we can finalise one or two customers for the conversion, which could be from combi to full cargo and passenger aircraft to full cargo.”

The Boeing 777 is also on the line-up for conversions. Originally thought to replace the 747, last year sought an agreement between IAI and leasing firm GE Capital Aviation Services (GECAS) to convert 15 777s, plus options for a further 15. GECAS are due to receive the first converted plane in the end of 2022.

“The 777 will be the future of our group in the widebodies segment. The 777-300ER will be the replacement for the 747 and MD-11. It will lead in the next 20 years,” comments Matalon. 

Thinking of the future 

So what does IAI expect to happen in conversions and aviation markets post-pandemic?

Matalon emphasises that although aircraft are able to be converted into freighters, there will still be a gap missed by passenger aircraft.

777-3F - BIG TWIN updated Livery 20190909 IAI

Before the pandemic, there was nearly a 50/50 split on cargo carried by freighters, and cargo carried in the belly-hold. Since passenger aircraft are unable to fly, freighters have been picking up the slack.

Along with many others in the industry, IAI believes that the market won’t go back to a semblance of normal until post 2022 and recover to pre-Covid levels until 2024 or 2025.

“I believe that this trend will continue until 2024 or 2025, but we’re ready to accept the same role that we have been since January 2020 for freighters.

Recent months have shown that IAI can turn its work around quickly and meet demand head-on, previously stating that “We’re very flexible, we have unlimited slots. We can adjust to any demand in the market.”

“This crisis gave us an opportunity with conversions. It won’t stay like this. When commercial flights go back to normal, we will go back to a more natural, organic growth that the market has expressed before,” concludes Matalon.

Sign In

Lost your password?