Listen: Xtreme Aviation on LatAm freighter market

In this week’s episode of the “Cargo Facts Connect” podcast, Cargo Facts Editor Jeff Lee and Associate Editor Andrew Crider speak with Carlos Cock, chief executive of Miami-based Xtreme Aviation, about the Latin American market for freighter aircraft, the preference for 737 Classics and the challenges and opportunities that are on the horizon. Cock will speak during a panel on narrowbody freighters at the upcoming Cargo Facts LATAM conference. The first-of-its-kind event will bring cargo leaders in the region to Panama City on May 15-17. Lee and Crider also speculate about the recent mystery order for four A350Fs . Tune in for a discussion of these topics and more for the week ending April 14, 2023. A transcript is available below. This transcript has been generated by software and is being presented as is. Some transcription errors may remain. Andrew Crider Hello and welcome to this episode of cargo facts connect the podcast of cargo facts, the newsletter of record for the air cargo and freighter aircraft industries for over 40 years. I'm your host Andrew Crider and I'm joined by Jeff Lee, editor of cargo facts. Cargo facts is very excited for the first ever cargo facts latam, which is coming to Panama may 15 through 17th. We are going to have a number of exciting speakers and panels, including our guest today, Mr. Carlos Cock, the Chief Executive Officer of extreme aviation. Carlos is a special player in the air cargo and freight aircraft industry. He brings more than 26 years of experience in the aircraft maintenance sector, and has been working on number of conversions. Yeah, he's graduated at Embry Riddle University. And I want to thank him for joining us today. Carlos, how are you? Carlos Cock Oh, I'm great. Andrew, thank you for having me. Andrew Crider Because you're speaking on our panel of Latin American carriers and the future of narrowbodies. And when we're talking about the future, helped me get a sense of where do you think Latin America as a region has been the last 10 years and the for the freighter aircraft industry? Carlos Cock Well, I think for the last 10 years, or South America has been a secondary market. And we're definitely seeing a shift in that with a lot of the new E commerce companies coming online and focusing on the region, Andrew Crider e commerce companies. Do you think that that's the primary driver of growth today? Carlos Cock No, not only, or there's also a lot of logistics dedicated to the Chinese market and their trade with Latin America. So there's a big influence there as well. Jeff Lee Carlos, I was gonna say it's the on the E commerce front that really has been sort of noticeable in the certainly in the much nearer term kind of in the past, you know, one or two years? And, of course, I'm thinking of mercado libre, as the most prominent, high profile example of them, sort of that deal with goal. But more generally, I mean, it seems like while the rest of the world is looking at slowing growth, would you say the opposite is true of the Latin American market? Carlos Cock Well, to be honest with you, I don't really see a slowdown in growth, I think we hit a little bit of a pause from the abnormal numbers created by COVID. So we're probably back on an upward trend, from regular numbers if, if you if you digest it properly. And I think that growth is going to continue, just picked up from your 2019 numbers, and maybe leaving the COVID era out of it. Jeff Lee And we are seeing, and this, of course, partly why we're so excited for our event, but we've seen quite a number of of new players joining the cargo market and on the freighter side as well, haven't we? Carlos Cock Yes, absolutely. Not only new players, but the some of the older existing companies are also in growth mode and renewing their fleets and you know, securing new new business in the in the region. Jeff Lee Now, you've worked with several companies, especially on the kind of the the 737 Classics, side. One of the things that we've picked up on recently in the past couple of years is how, as markets like Europe, primary markets moved to the NGS one of the places where the classics are heading is precisely Latin America. Just how much potential is there for more classic growth in Latin America. Carlos Cock Oh, there's great upside and great potential. You know, several of the Latin America and carriers have older fleets and fleas out there. We're getting ready to renew. And we've been assisting a couple of them in, you know, upgrading their fleets 737, three hundreds, four hundreds. And now we're probably going to start seeing in the next couple of years, some of those carriers actually going into eight hundreds as well. So it's it's catching up fast. Andrew Crider We see a diverse body of trigger type for the region, it seems What would you think that there's any specific characteristics of a freighter aircraft, or any specific freighter type that is going to be truly essential or more valuable for the latam carriers? Carlos Cock Yeah, the 737 Classic has been a preference aircraft. But as they come older, I think the carriers are definitely looking at the eight hundreds as their best fit for the region, you know, for for range, fuel consumption, you know, economy. There's also a couple of airlines introducing the A 323 21. freighter into the region. But that's still very early. So we will have to see how that goes. But I think the preferred aircraft is going to be the 800. Andrew Crider Now, I know Embraer has introduced the conversion for the Embraer e 190. In the Egypt family, which is something very exciting. Do you think that that's going to be a threat for the classic market? Carlos Cock No, I don't think it'll be a threat. They're rare will carry, you know, less less payload. The numbers are attractive when it comes to, you know, the cost and the operation. But I think for for short hops, it's a good aircraft, so won't directly compete with the three hours plus of the 800. And I think that's the different market, if you will. Now, Andrew Crider let me ask you a little bit more about what extreme does is you work a lot with 737 Classics. Let's say one comes in the shop for you. What are some of the things that you you do to upgrade this this old, some would say older aircraft platform. Carlos Cock Well on our aircraft comes in for conversion. We're stripping it and tearing it down basically to bare bones. So in the process of doing that, there's a lot of corrections, a lot of findings that get upgraded. So when the aircraft leaves our facility, it basically has not only a facelift but a full body lift. And you know, the condition of the of the freighters improve drastically. So it will be an aircraft that's going to last, you know, Well well well into 15 20 years. Andrew Crider So I know last year, or by last year. I mean 22 at EMEA texel was talking about how they upgraded a number of their freighters with Rockwell Collins avionics to help shoot some more difficult approaches, are you able to upgrade the avionics in a way that changes the capabilities of the 737 Classic? Carlos Cock Yeah, absolutely. And these are all STCs that are out there in the market. It all depends on the specific customer needs. So if a customer is looking for these upgrades were definitely able to provide and perform the modifications but yeah, they do they do help Jeff Lee Carlos just curious I mean, obviously you you're the panel is focusing on the narrow Body side but how do you look at the wide body freighter market in Latin America? Carlos Cock Well, the wide body market in Latin America I think it's dedicated to the the bigger carriers you know the DHL the LATAMs. And they are definitely looking at, you know, not only the six sevens, but I know that triple seven is of great interest to them as well. You know, with long range routes, like Miami to Chile and Argentina in some regions of Brazil. These are very favorable. Jeff Lee Yeah, and you were also talking about, you know, the Trans Pacific trade and, of course with now with China. Opening back up. There's, I would imagine that a lot of these carriers are looking at that market. Now, obviously, there that simply isn't a viable way for them. Does that trade nonstop right now? But you know, we're also seeing mas right in Mexico with their ambitious plans. Carlos Cock Yeah, correct. You know, mas has been a 767 operator for numerous years, and they've been successful. And in that market, you know, feeding the the region. The Central America region, it's a it's a different animal a little bit from the South American region. Andrew Crider Carlos, at back to Latin America. What do you think is the timeline to win a 737? Entrust your shop, and then how quickly you can turn it around? Because we know demand and availability, the 737 platform specifically? It's a big deal. Carlos Cock Yeah, absolutely. We're gearing yourself up for a line of conversions. This year as well, we are starting a sudden, 37 400, possibly mid next month. And we're looking at three and a half months, three and a half to four months turnaround time, with an additional induction right after that. So you know, we know the market? Is there. Jeff Lee Looking forward to seeing that. Andrew Crider But a final question for you, Carlos, and I'll let you off the hook. What are you most excited about for Cargo facts Latam? Carlos Cock Well, I think it's going to be a great opportunity for all the carriers, especially in South America, and some of the Central America region to get together and not only view their industry as a whole, but also see where the growth perspectives are as far as aircraft and what type of aircraft are going to be, you know, available, and and trending in the upcoming years. I think that is going to be a very exciting growth period in the next four or five years for the region. So we're all excited and happy to be part of it. Andrew Crider Well, Carlos, that's that's all we had. I want to thank you so very much for joining us on The cargo facts connect podcast. Jeff, you would have to correct me this would be our first guest and how many years? Jeff Lee not years? Maybe? Months? Not years. Andrew Crider It's been a while. And we're very, we're very happy to have you. Yeah, Carlos Cock from extreme aviation, doing some truly incredible stuff. We're excited for you to join us if you want to meet Carlos, yourself. I believe Carlos, you're going to be at cargo facts latam on May the 15th through 17th. In Panama, you can find out more information about that event at cargo facts. events.com/latam. Carlos, thank you so much for joining us. Carlos Cock Thank you, Andrew and Jeff, and thank you to the cargo facts family for always keeping us in mind and keeping up with our growth and projects. Thanks, guys. Thank you guys. Andrew Crider Thank you, Carlos. I want to put it back to you, Jeff. I believe that we have one of the most exciting mysteries that hits the air cargo industry, and a long time with a new a 350 F. Tell us more. Jeff Lee Yeah, it is pretty exciting on several fronts, but I guess just the first is that well, this is the first production new generation production freighter order this year for 4 350s, but the intriguing thing is that this the customer for this is unknown. And right now at least which so there's there's a couple of questions that we should be asking I suppose. But I guess one would be just mostly the obvious one Who who is it? But kind of a side question is are they referring to remain unidentified? Until that's the that maybe the Paris Air Show or even later this year, the Dubai Air Show? Something like that? Or is it going to be one of those unidentified until the delivery kind of deals. But I on the topic of who it might be it, I want to say there's there aren't that many options. But on the other hand, the potential is also pretty wide because well, they it could be a leasing company, for instance, they very often they'd like to remain unidentified. And but the other side to it is, it could be a, it could ultimately be for a Chinese carrier, for instance, very often those carriers, unidentified to begin with. And part of that has to do with how all aircraft orders work for China. Usually, either basically the government or some arm, the government that controls the holding company of the airline, and then the then distribute that the aircraft to the carrier. But Andrew Crider so are you saying that you think that the order came from China? Jeff Lee I'm not saying that definitively. I'm just saying that that is a possibility. But then the number also is kind of interesting, or isn't huge. But it also is, well, it's not trivial. And that brings us to the point about just all of the 350. order numbers so far, they have almost all been either for seven or four. And we made a joke at the time, didn't we? How this was kind of nod at the 747. And how the A350 F is targeted at replacing the 747. freighters. Of course, silk way ordered two but that apart from that, but I think all of the other ones are four or seven units or four units. So, yeah, it's also I mean, the other possibilities, potentially. I was wondering, I have to be when I saw the order, I was thinking of China Airlines in Taiwan, because they have a huge fleet of 747 or hundreds to replace. And yes, they do have them they've started that process with the current generation triple seven, but who's to say they don't go for mixed fleet? I mean, they certainly have a mixed fleet on the passenger side, and they have a 350 Passenger passenger version. And then the other kind of possibility, I would say, maybe Asiana which eventually will merge with Korean to become one giant entity. Again, they have some older 747 conversions. And they had previously told us that they were in the process of deciding the replacement for those. And they have the They also operate the passenger version of the 350. So there's just a few possibilities. Now of course, it could be some someone completely unexpected, which would be nice, too. Andrew Crider Well, we'll certainly have to find out more. I think as far as a 350 You're talking about it could potentially be number of Asian carriers. I would think that whoever would ordered a 350 Asia will be interested in the Asia Latin American trade, which has just been exploding in the past few years. So perhaps we will find out who ordered this, a 350 cargo fax last half or even next week. And as well I want to close it out with a next week would be cargo facts. Asia, returning to Singapore, April 17, through the 19th which is going to be uniting all the industry leaders in the Asia Pacific region for a really wonderful event and hopefully maybe we'll find out more about the eighth there. Jeff, is there anything about cargo facts Asia that you're particularly excited about this year? Jeff Lee Well, just getting all the carriers together. Because yeah, it's been what 3 3 4 years since we had cargo facts Asia and things are certainly looking different now Andrew Crider Certainly it has been a very long time and we're happy to return and we'll be covering the event in detail and posting those, those information on cargo facts.com Which leads me to a conclusion that that is all the time that we have for today. For those of you tuning in, I want to thank you. For more multimedia content like this search cargo facts connect on iTunes and Spotify and search Cargo facts.com. Thank you very much for tuning in. And join us again next time. Subscribe to Cargo Facts Connect on iTunes or Spotify , or download the episode on Transistor . Don’t miss our two upcoming events that are essential for stakeholders in Asia and Latin America: Cargo Facts Asia , taking place April 17-19 in Singapore, and Cargo Facts LATAM , taking place May 15-17 in Panama City. Early bird registration for CF LATAM ends today.

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