Aircraft passenger-to-freighter (P2F) conversions are continuing at a stable rate, but experts are keeping tabs on a potential oversupply scenario. The latest freighter value analysis by aviation advisory firm IBA shows conversion rates progressing steadily.
Conversion Numbers Climbing
“It may even slightly exceed 60,” said Jonathan McDonald, manager – classic and cargo aircraft at IBA.
Just over 55 B737-800s were converted last year and it’s by far the most popular P2F programme. But Mr McDonald cautioned: “I don’t think you want to exceed that number because you’re just going to be creating potential for huge oversupply.”
IBA has spotted a few converted -800s publicly listed for sale and Mr McDonald suggested the aircraft were not being placed as quickly as they once were. And he warned: “Also, you run the risk of further softening the value and lease rates on them.”
The B737-700 and A320 converts will remain niche. he said, adding: “It is clear that the market is gearing up around the -800 and the A321. In fact, the A321 should present some significant opportunity in the future considering there’s still a large tranche of passenger A321s out there.”
Insights from Jonathan McDonald
Mr McDonald noted: “These new aircraft won’t arrive for a while, so the B757s might be too old for conversion by the time they finally come out of Icelandair. It’s a similar scenario at United.”
“It’s not a criticism of the A330-300, but there is just a large stream of B767-300 conversions, although the feedstock is beginning to dry up.”
Mr McDonald sees enthusiasm growing for A330s. He said: “We have seen a lot of recent announcements for A330s, but these are just announcements to acquire them. The actual conversions will likely happen in 2024 or 2025. We see the A330 coming up quite substantially as time progresses.”
IBA expects to see the A330 conversion rate overtake B767s from, perhaps, 2026 – and definitely from 2027.
The average fleet is around 22 years old, but Mr McDonald said the good news is that a good chunk of the fleet is cf6 powered – “operators of the -400F, concerned about how to replace them, will see plenty of material still around to support that ageing fleet.”
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Source: The Load Star
