- An air cargo capacity crunch due to a perfect storm of increased demand and a sharp fall in supply has led to a boom in passenger-to-freighter conversions.
- Hot Commodity Analysis from the AirInsight Group shows that 104 freighter conversions entered operators’ fleets during the first half of 2021, suggesting a pace for more than 200 deliveries this year.
- Boeing’s 2021 Commercial Market Outlook forecasts that air cargo growth will create a demand for 2,610 freighter deliveries globally in the next 20 years, and the bulk of the delivery units—1,720 units or 66% —will involve passenger-to-cargo conversions.
- Boeing historically has dominated P2F conversions.
Due to a perfect combination of growing demand and a steep drop in availability, there has been a surge in passenger-to-freighter conversions as reported by AinOnline.
Air cargo shipping
With the commencement of the pandemic in early 2020, supply plummeted due to a reduction in capacity in the lower cargo holds of passenger planes as a result of international travel restrictions disrupting passenger flights.
According to Boeing, about half of all global aviation freight travelled via widebody passenger lower cargo holds prior to the epidemic.
Parallel to this, increased e-commerce growth, supply chain disruptions, severe marine disruptions, and economic recovery boosted demand for air cargo shipping.
According to the International Air Transport Association, air freight demand will grow by 8% this year and 13% in 2022, compared to pre-crisis levels (2019).
In the long run, Boeing forecasts a 4% yearly increase in demand measured in revenue-tonne-kilometres over the next 20 years.
Conversions have increased
As a result, demand for passenger-to-freighter (P2F) conversions has increased, leading to an increase in the number of aircraft types undergoing conversion, growth in the portfolios of lessors, and an increase in the number of aircraft engineering providers entering the market around the world.
Bob Convey, senior vice-president of sales and marketing at Aeronautical Engineers, said, “We’re seeing a greater worldwide distribution of conversion centres” (AEI).
AEI is only one example of a P2F conversion company that is increasing its reach.
Almost all of its rivals are following suit.
For example, Israel Aerospace Industries (Stand 300) recently signed agreements with Atitech, an independent MRO, to open a passenger-to-freighter conversion site for 737-700/800s in Naples, Italy; Ethiopian Airlines to open a 767-300 conversion site in Addis Ababa, and Etihad Airways Engineering (Stand 1110) to open two conversion lines dedicated to the new “Big Twin” 777-300ER P2F programme in Abu Dhabi.
Incheon International Airport and Sharp Technics signed a memorandum of understanding with IAI to establish 777-300ER and 777-200LR P2F capabilities in South Korea.
According to the AirInsight Group, 104 freighter conversions entered operators’ fleets in the first half of 2021, ranging from widebody jets to regional turboprops, implying a pace of more than 200 deliveries this year.
This represents a significant increase over the 58 P2F units delivered in 2019 and 81 in 2020. “In the short term, the P2F market solves both supply and demand difficulties.”
According to Boeing’s 2021 Commercial Market Outlook, worldwide air cargo growth will necessitate 2,610 freighter deliveries over the next 20 years, with the majority of the deliveries—1,720 units or 66%—involving passenger-to-cargo conversions.
Production freighters were represented by 53 aircraft—four 747-8Fs, forty 777Fs, and nine 767Fs—while Boeing converted freighters (BCF) were represented by 74 aircraft.
P2F conversions have always been controlled by Boeing.
Airbus, on the other hand, wants to eat into its competitor’s market share.
The first A321-200 conversions used planes manufactured in the late 1990s, but as more A321neos are delivered and more A321ceos are retired from passenger service, a move expedited by Covid-19 and pressure to reduce CO2 emissions, younger planes are being converted.
With the air cargo business booming and the EFW A330P2F production lines—which have 100 slots available—sold out until 2025, IAI decided it was time to follow through on a year-long promise to establish its own A330-300 freighter conversion programme in collaboration with Dublin-based aircraft lessor Avolon.
Because Airbus is a shareholder in EFW, we have a vested interest in that solution.
Changing of the guard
Since the model’s introduction in 1994, Airbus has received orders for 1,442 passenger A330ceo planes and delivered 1,418 of them, ensuring an abundant supply of airframes to maintain the conversion programme for many years.
According to McDonald, market interest in A330 cargo conversions has mostly concentrated on the -300, citing “rapidly dropping” feedstock pricing for A330 passenger aircraft.
According to Leeham News, 249 A330-200s and 245 A330-300s were in storage on June 30.
As a result, cargo operators can go for a much younger aircraft than the early MSNs—order EFW’s book included two ex-Singapore Airlines A330-300s produced in 2013—and “reap the benefits of additional years of useful life and a longer-term investment in the asset,” according to the consultant.
According to Sanderson, Airbus’ current conversion lineup has “not garnered market traction at this moment.”
Airbus has only sold 38 A330Fs in production, and the new A350F has yet to attract a launch customer.
Did you subscribe to our newsletter?
It’s free! Click here to subscribe!