Jetrader - Summer 2018 - 23

737-800
The logical replacement for the 737
Classic is the 737-800, a successor aircraft with one additional pallet position
versus the -400 and improved operating
economics. AEI was the first to announce
a program with an order for GECAS but
was quickly followed by Boeing and Israel
Aircraft Industries (IAI) announcing their
own programs. Boeing delivered its first
unit in April with AEI's first delivery
expected by the end of 2017. Currently,
737-800 passenger aircraft values are
too high to produce a cost-effective
freighter, despite its improved operating
economics versus the 737 Classic. When
the 737 MAX reaches a mature production rate, 737-800 values will begin to
fall, which will stimulate demand for converted freighters. The 737-800 conversion
should reach sustainable production rates
by 2021 or earlier.

757
The 757 converted freighter has proven
to be a workhorse for the integrated operators, including DHL, FedEx and UPS. As of
this writing, 249 aircraft have been converted with a backlog of 27 units. Precision
Aircraft Solutions and ST Aerospace provide conversions at facilities in the United
States and China. The airplane's success
is almost completely attributable to the
integrators who operate 75 percent of
the converted fleet and Chinese express
and mail carriers who operate 15 percent. Although B757 feedstock is sufficient with nearly 200 aircraft remaining
in current passenger operation with low
cycles accumulated, two factors point to
a wind down of 757 freighter conversions
beginning in 2020. First, the integrators
have almost completed their 757 freighter
additions while the Chinese carriers collectively have completed 55 percent of
their known and anticipated freighter
conversions. Secondly, the availability of
engines with sufficient remaining operating life is already an issue and will only
become more acute in the future, requiring
an increase in shop visit activity.

development for an A320 conversion. This
aircraft carries 10 full-size main-deck containers and has a 41,000-pound payload.
Both the A320 and A321 have the option
for containerized freight on the lower
deck, a feature not available on Boeing
narrowbody freighters. The A320SF will
be a replacement for the 737-300SF and
737-400SF. EFW expect to deliver the first
aircraft in 2020, however neither company
has publicly announced a launch customer.
Conversion-age feedstock is plentiful; however, availability and pricing are currently
an issue. This limitation will ease by 2020
with the buildup of the A320neo fleet.
It is too early to determine the market
acceptance for the A320-200SF.

A321-200
Two companies, EFW and 321 Precision
Conversions - the latter of which is jointly
owned by ATSG and Precision Aircraft
Solutions - are actively developing an
A321 freighter conversion. Interestingly,
both companies have the same launch
customer - Vallair Solutions. Although
certification is expected in the next 12-24
months, neither company has secured a
significant order, but active discussions are
underway with the integrators and other
potential operators. The aircraft will be
available with as many as 14-main deck
pallet positions, a payload up to 60,000
pounds and a range of 2,300 nautical miles.
It's a suitable replacement for the 757SF and
as a growth aircraft for the 737-400SF. The
program faces two constraints to achieve a
sustainable production rate. First, since the
A321 production did not increase significantly until 2008, the population of aircraft
in the age band typical for conversion is
limited. Secondly, the cost and availability
of aircraft in this age band is very limited as
passenger carriers elect to renew leases and
the impact of the A321neo deliveries has
not yet been significant. Fortunately, both
of these limitations will ease over time,
and the A321 conversion can be expected
to have a long, successful production run
beginning in the early 2020s.

A320-200

Widebody Freighters

Two companies - EFW, a joint venture
between ST Aerospace and Airbus, and C3 -
have initiated engineering research and

Although the 767-300ER conversion program had a rocky start 10 years ago due to

767-300ER

the delay in initial 787 deliveries, which
reduced available feedstock, it is now well
established with 69 units converted and
a backlog of 28. Much of the credit for
this resurgence goes to Amazon's Prime Air
operation, which is nearing its goal of 40
aircraft in operation. Air Japan operates
a fleet of nine aircraft on Asian regional
service and Cargojet Airways has a fleet
of nine aircraft primarily in service for
Canada Post. Given the continued growth
in e-commerce and air freight in general,
plus a growing supply of feedstock from
carriers such as American and Delta, the
767-300ER conversion programs offered by
Boeing and IAI Bedek will be active into
the 2020s.
Several years ago, Boeing planned on
shutting down the commercial 767-300 production line to focus on the KC-46, the 767
military variant repurposed as an in-flight
refueling aircraft. FedEx was approached
about taking "end-of-the-line" 767s but
convinced Boeing to keep the line open.
As a result, FedEx has taken 111 aircraft
with a backlog of 54 more units with seven
more units on order from other customers.
Boeing, which foresees strong and sustained demand for the aircraft, recently
announced a production increase beginning
in 2020 from 30 to 36 units per year.

A330
The principal competition for the 767300ERSF will come from the A330-300SF.
Initially, Airbus offered the A330-200 production freighter. This shorter fuselage/
longer range version of the A330 was unable
to achieve broad market acceptance due to
the capital cost and volumetric payload limitations. With 42 units delivered, only four
additional aircraft remain to be delivered.
In February 2016, ST Aerospace expressed
its commitment to the A330 conversion
when it increased its shareholding in
EFW to 55 percent with Airbus retaining
45 percent. EFW continues to enjoy access
to Airbus proprietary engineering data,
a critical element in achieving the aircraft's
full potential as a freighter. In December
2017, EFW delivered the first A330-300P2F
to launch customer DHL. Three additional
aircraft are in work for delivery this year.
While DHL can be expected to ultimately
have a large fleet, no additional orders have
been announced. Many operators are closely
Jetrader * Summer 2018 23

Jetrader - Summer 2018

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