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Freighter conversion market sees significant growth

There have been some significant changes in the freighter conversion market. Ian Harbison and Keith Mwanalushi report on two of the participants.

IAI Bedek

Yossi Melamed, executive vice president at IAI & Bedek General Manager, says the company is back in the Boeing 747-400 conversion business. It delivered two aircraft to Asiana in 2017 and has received several enquiries since then.

Demand is being driven by a need for long haul, high volume freighter capacity, but IAI is in a good position as only a few aircraft are in desert storage, and the company is the only company with an active line.

Freighter, conversion market, MRO Management

It also has considerable experience, having converted 29 747-400s to its BDSF (Bedek Designed Special Freighter) configuration from 2005 to 2011. The conversion period is about 120 days, including a heavy check, landing gear or engine replacement, and avionic upgrades.

In parallel, the 767-300 market continues to do well, with 18 aircraft delivered in 2017 and the same number scheduled for this year, with 2019 ‘not bad’. The driver here is e-commerce – he points out that 26 out of the 30 aircraft in the Amazon fleet are Bedek conversions.

He adds that 787 delays are still affecting feedstock as aircraft remain in passenger service. On the 737, it has delivered a number of -700 freighters (it is the only company with a 737-700 conversion STC).

Freighter, conversion market, MRO Management

He comments that perhaps Bedek entered the market a little bit early as residual values are still a bit high, as are those for the -800, but it does mean it will be ready when the market picks up.

As part of this process, and recognising the importance of the Chinese market, the first -700 has been inducted at Bedek Lingyun (Yichang) Aircraft Maintenance Engineering (BELINCO), a joint venture with the Lingyun Science & Technology Group and located at the Three Gorges Airport in Hubei Province.

Finally, he adds that the 777 is under study, although residual values are too high, and that the Airbus A330 and A321 also have potential.

Freighter, conversion market, MRO Management


Peter Koster, head of cargo conversions at Vallair, says there is a gradual shift from 737 Classics to NGs as feedstock for conversion.

In April, West Atlantic took delivery of the first 737-800 Boeing Converted Freighter (BCF). The operator will receive four 737-800 aircraft in addition to its current Classic fleet.

West Atlantic expects the additional capacity and NG efficiency offered by the -800 will deliver real benefit by improving reliability, lower aircraft operating costs, and provide a better environmental footprint.

However, he says there could be limited availability for the -800 until around spring 2019, having an impact on current feedstock prices.

Then comes the issue of engines, which is a market of its own: “You don’t want to end up hanging on to too much value on your wings while flying low utilisation programmes. So, there are two markets that you need to observe; one is the feedstock on the frames, but also the feedstock on the engines.”

Vallair has also turned its attention to the Airbus A321. In February 2018, Elbe Flugzeugwerke (EFW) announced that it had secured a launch contract from Vallair for 10 A321-200 passenger aircraft to a 14-pallet cargo configuration.

For the A321, it’s quite clear that there is demand for that type of capacity: “We have signed agreements with both convertors, EFW and 321 Precision Conversions.”

For airframe MSN 891 to Precision (prototype) the expected time of delivery will be 4Q19, Koster reports. He says the next aircraft MSN 835 was due for induction to EFW, and the conversion will be done by ST Aerospace in Singapore. Notably, delivery for the EFW aircraft will also be at the same time as the Precision A321 in 4Q19.

Freighter, conversion market, MRO Management: Longhao airlines

“Obviously there is a difference in time frame. The prototype with Precision is significantly more complex than it would be with EFW having all the data from the OEM. One is an OEM-supported conversion, and the other a reverse-engineered conversion design,” Koster explains.

Vallair has purchased several A321s and placed them on lease agreements with various operators to expand the cargo conversion portfolio. These aircraft will ultimately serve as ongoing feedstock for the company’s launch of the P2F cargo conversion programme.

What about its smaller sibling the A320, and its candidacy for conversion? “The A320 is having like for like competition that the A321 doesn’t have. In my opinion, the success of the A320 is dependent on the success operators have with the A321, in which the single-type operation for an operator will make it cost efficient to run the A320 in parallel.”

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