Freighter conversions: The future has (finally) arrived

Today we begin a multi-part analysis of the passenger-to-freighter conversion market with a look at how the conversion landscape has evolved from a long period of very little change, to the current point of transition to a whole new landscape.

For most of the last fifteen years, the freighter conversion market has been relatively stable. On the narrowbody front, passenger-to-freighter conversion programs were available for Boeing’s 737-300 and -400 variants (the 737 Classics), and 757-200. And if you wanted a widebody, you could choose among the Airbus A300-600, Boeing’s 767-200 and -300, MD-11, and 747-400. As the years went by, demand for the 767-200, MD-11, and 747-400 declined, and their conversion programs were ended, but the other types stayed in demand, and, with feedstock available, conversions continued at a rapid pace.

But all parties in the conversion market – operators, lessors, and conversion houses – kept one eye on the future, knowing that however happy they might be with a particular type of converted freighter today, the time would come when feedstock would dry up, and new types would have to be brought into play. 737-700s and -800s (the NGs), and Airbus A320s and A321s were the candidates to meet the needs of those looking for a narrowbody, with A330-200s and -300s and 777Fs on the widebody side.

One by one, the major conversion houses announced the launch of new programs for all of these types except the 777. But announcing a future program launch doesn’t cause much change in the current market, and, while it was clear that new types of converted freighter would be available someday, that someday seemed far off, and orders for conversion of the 737 Classics, 757-200, and 767-300 continued to roll in. Only the A300-600 fell off the radar, and that was mostly because feedstock was exhausted.

During this period, Aeronautical Engineers, Inc (AEI) launched and certified conversion programs for two new types, the MD-80 series and the Bombardier CRJ200, and began redeliveries. But these were widely considered (even by AEI itself) to be niche freighters that would not really change the overall conversion landscape.

But, on 26 September 2017, the future of freighter conversions became the present, when Alaska Airlines put the first of the major new types – a 737-700BDSF converted by Bedek Aviation Group – into service. Just over two months later, on 1 December, DHL Express took redelivery of an A330-300P2F, following conversion by EFW, and even those who hadn’t noticed the service entry of the Alaska Airlines 737-700BDSF could no longer deny that 2017 was the beginning of the Big Change.

The charts at right show the conversion landscape for currently active and formally launched passenger-to-freighter programs for jet aircraft. As discussed above, the CRJ200, 737-300, 737-400, MD-80, 757-200, A300-600, and 767-300 programs have been under way for some time, and the Bedek 737-700 and EFW A330-300 programs saw their first redeliveries in late 2017. Redeliveries from most of the other programs will begin over the next two years, with perhaps one or two not entering service until 2020.

Next year will see GECAS take redelivery from Boeing of the first freighter-converted 737-800BCF (likely in late January), and this will be followed, over a period of about two years, by the first redeliveries of other types, and of same types from other conversion houses.

During this transition period, conversion and redelivery of the previous generation of aircraft will continue, and freighter-converted 737 Classics, 757s, and 767s will continue to enter service. In fact, there are those who predict that, as long as feedstock is available, the difference in price between these older types and their prospective replacements will ensure that service entry for the new types in quantity will be postponed.

But will it? Not everyone agrees, and tomorrow we begin Part II of this analysis with the argument for a rapid increase in demand for the new types, and follow that with a look at the individual companies in this market and their many conversion programs.

You can read Part II here.

You can read Part III here.

You can read Part IV here.