Watch: A321 freighter milestones and 767-200F reassignments

For the week ended May 14, Cargo Facts reported on two new A321-200 leasing ventures with a new JV from ST Engineering and a move into A321 conversions by lessor Aerovista , highlighting the coming wave of activity now that two passenger-to-freighter conversion programs have received an STC. This week also saw DHL Express add 21 Air to its list of 767 CMI operators , prompting the Cargo Facts team to revisit the outlook for 767 CMI operations in this episode of the Cargo Facts Weekly Wrap. A transcript is available below. This transcript has been generated by software and is being presented as is. Some transcription errors may remain. Charles Kauffman Hi everyone and welcome to this episode of cargo facts connect the newsletter of record for the air cargo and freighter aircraft industries for over 40 years. I'm Charles Kauffman, Senior Editor of cargo facts. And this is our weekly wrap for what's happening in industry for the week that ended May 14. And before we begin, I'd like to thank our sponsors and advertisers 321 Precision Conversions, Ancra international, AEI, C Cubed Aerospace, EFW, Telair, ULDrentals.com and IPR conversions. I'm pleased to be joined today by Jeff Lee. Hi, Jeff Jeff, for starters, we've seen quite a lot of activity this week with A321 200 conversions. What were some of the highlights from this week? Jeff Lee Oh, yes, in recent weeks, actually. Firstly, congratulations again to 321 precision conversions for STC. And you know, we will surely see the first aircraft going over to motor the smart links. So that will be exciting to see. And we know that the second frame that they'll convert is already there at the outside facility. And in addition to that, we know that the next frame that they'll the first frame actually that they'll convert at the PEMCO facility in Tampa is already there on site and they'll begin work on that shortly next month. So, you know, going back to this week we saw ST Engineering and Singapore’s sovereign wealth fund, Temasek announced that they'll serve a JV for narrowbody freighters, leasing narrowbody freighters, which is interesting, because we've recently we've seen similar kinds of JV freighter leasing jayvees. But s actually st engineering itself already has an asset management division. And they are actually the first level that we know of to have both A320 and A321 conversions because the first increase 20 that went into conversion recently is actually owned by ST itself. And St. on, you know, also has another JV called Keystone holdings, and that company owns one of the Qantas favorite ones that they they say will be coming into Singapore token versions soon. So, you know, there, there's lots of activity with regard to every 21 conversions. And also, this week, we wrote a story on a vessel called Aerovista in the UAE. And they told us that they'll be looking to convert, initially, these two frames one each with returns one precision conversions, and EFW. So, you know, this kind of is similar to what SmartThings is doing with, you know, testing out both STCs. So, it will be interesting to see who takes up those frames. And now with two programs, to 321 conversion programs certified, I think we will continue to see, you know, this free new freedom model gaining more traction. And, you know, recently we saw GTL k leasing, placing an order with the W four for conversions. But the interesting thing is, you know, when we see the larger players moving in, because, I mean, we don't know whether they they've already signed deals, but you know, with slots becoming more of an issue, the larger players will see when they move in. But it's interesting that so far known orders haven't come from the large players and life with the 737 800 for example, where g cast was very early to move in with you know, large numbers of conversions. So, I guess we'll just see, but switching gears a bit to the 767 which also is seeing a lot of activity these days. With 21 now in the US joining you know the list of DHL CMI providers, you know, with what do we think the outlook for 767 200 you know, CMI operations looks like Charles Kauffman it's an interesting question and certainly if you had asked me, you know, two years ago, what is the outlook 44767 200 conversions or conversions in general and CMI operations more broadly for that model look like? I probably wouldn't have bet too much on that. You know, of course, the size of the CMI market is a reflection of real deliveries and your fleet growth. And certainly, we're not expecting to see many new 767 to hundreds redelivered as freighters Charles Kauffman at the moment and for the foreseeable future, DHL Express and Amazon are really the two main customers for CMI operated 767 200 freighters what we are starting to see and what he pointed out with 21 air is some reassignments to DHL is existing 767 200 PDS f freighter fleet that is operated on a CMI basis. So, Atlas air had been operating 9767 200 freighters for DHL as of last year as part of the beginning of 2020, I should say, as part of two separate multi year deals. And we've seen four of those aircraft reassigned to Amerijet. So those are now operated by marriage for DHL Express in the Americas. And then that left five one of those has been or is in the process of being reassigned and added to the AOC of 21 air. You know, and so that leaves for at least I wouldn't be surprised if we see additional reassignments so there is some evidence that those aircraft are at least two of them are in maintenance and we could see some additional movement there. And you know, these aircraft are there, they're not young, they weren't recent redelivery. They've been through a few different lease terms they're approaching 4040 years. So you know would DHL have even chosen to renew these deals weren't not for the covid 19 pandemic, which up ended the capacity situation. I'm doubtful of that. But that's not something I have had visibility into was not watching the 767 200 fleet. All that close closely. But a similar situation is unfolding in the Middle East as you've reported, Jeff, so DHL his own carrier based in offering DHL international aviation Middle East had upgraded 6767 200 vdss and of course, DHL is a has purchased some 767 300 er airframes and is in the process of putting those through conversion and so the expectation is that the bartering based carrier will replace the own operated 7672 hundreds with the DHL owned 7673 hundreds but you know given the capacity situation the market for medium wide body capacities is still very hot and we already are starting to see that even if these seven six sevens aren't going to be operated by by DHL zone carrier there's a strong possibility at least that there'll be operated for DHL Express perhaps in a different region and under different terms so on an on a semi or semi basis and so we know that of the six at least three have already already have a home lined up so what is with Poland based sky taxi and we expect to see additional aircraft go to to RIAA and to start air in Denmark so at least two of the three continuing to operate for for DHL Express but that does show that there are still some opportunities for for possible sentence examine 200 CMI contracts. Jeff Lee Yeah, and I guess you know genuinely the 77 market is obviously still thriving. And that bodes well for CMI additional CMI operations doesn't Charles Kauffman Yeah, definitely. So, particularly on the 767 300 side and, you know, Amazon has been the main driving force behind growth of the 767 300 freighter fleet operated on CMI basis although DHL has also headed some aircraft. So not exclusively Amazon by any means. And of course, there are plenty of seven six sevens being re-delivered to other carriers who continue to operate the aircraft. And now, what is has been quite an interesting development at least since last year is that Amazon went out and purchased 11 of its own 767 300 ER aircraft and is putting those through conversion. So for four of the 11 have already have operators lined up, CMI operators lined up, but there are at least seven additional aircraft that will be redelivered three through 2022 that do not yet have a CMI operator assigned. So we know that there are several operators in the US that would be keen to take those on including Amazon's existing CMI partners for the 767 Atlas air and affiliate carriers of atsg but also some of the other 767 CMI providers that do not currently have a relationship with Amazon. So, I would not be surprised if if the marriage Edson and 21 errs that are taking aircraft on a CMI basis and operating those four for DHL Express if they're also content are contenders for, for these Amazon aircraft, we have seen, you know that Amazon is open to additional partners to have their own aircraft or going to Canada and will be operated by cargo jet. So, There certainly is a growing number of contracted partners. Jeff Lee Yeah, it's interesting. I mean, I was gonna say Cargojet itself is of course, converting its own seven 672 at the same time, so it's been interesting to see all this growth, but we shall see why these Amazon 767s end up. That's it for now. Thank you for tuning in to the weekly wrap on effects. For more multimedia content like this, check out Tiger facts.com and search Tiger facts connect on iTunes and Spotify. Join us again next time Subscribe to Cargo Facts Connect on iTunes or Spotify , or download the episode on Transistor . Cargo Facts EMEA, taking place June 2-3 as a virtual experience, is the event for exploring opportunity in the EMEA region. The event continues to bring together the best, brightest, and most innovative executives in the global air cargo industry. Learn more and register at www.cargofactsemea.com .

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