From the Cockpit with GAMECO’s Marc Szepan

China has become the epicenter of passenger-to-freighter conversions, accounting for more than fifty percent of conversion sites globally with ten sites that have active lines for the Airbus and Boeing platforms. A major Chinese conversion sites is Guangzhou Aircraft Maintenance Engineering Co. (GAMECO), which offers multiple lines for Boeing’s 737-800BCF and 767-300BCF programs. The facility also started working on the first ARJ21 freighter conversion at the end of 2021, a prototype that began test flights in late 2022. [caption id="attachment_56864589" align="alignright" width="450"] GAMECO General Manager Marc Szepan. (Photo/GAMECO)[/caption] Cargo Facts recently caught up with GAMECO General Manager Marc Szepan to discuss its conversion business, plans for growth and the outlook of the conversion market in China. What follows is an edited version of the conversation. Cargo Facts : What are your main objectives and priorities when it comes to your freighter conversion business? Marc Szepan : I took over as GM in October of last year at the tail end of COVID. We all are painfully aware of what happened in the aviation industry in general during the pandemic: A lot of companies lost a lot of money, had to lay off team members and had to make some really tough decisions on how to prioritize immediate survival at the expense of investing for the future. GAMECO is in tremendously good shape because we were able to invest in our future in terms of people and facilities. Throughout the pandemic, GAMECO did not lay off a single employee due to COVID. We also built a sizable third hangar at our main site in Guangzhou, which is China’s second-largest hangar today, and put it into service at the end of 2021. During the pandemic, we also invested in new large, state-of-the-art facilities for component repair and overhaul, and composite repair. As our industry recovers and returns to a pre-pandemic growth path, our objectives include the following: First, we are committed to making sure that we continue to be a safe, reliable and efficient partner for our customers as they ramp up their own operations. Secondly, we will put to good use our recent investments into capacity and capability growth, and we aim to grow our domestic and international third-party business. Specifically with regards to our conversion business, we are one of the largest suppliers of the Boeing Converted Freighter (BCF) program worldwide with a total of five lines for the 737-800BCF and 767-300BCF, and want to make sure that we deliver on those commitments to Boeing. CF : There’s competition between the freighter conversion business and other potentially more lucrative MRO projects. What is that situation like for GAMECO? MS : As a foundational principle, we only commit to business that we are confident we can deliver. We do our best to not put ourselves in a situation in which we have to make trade-off decisions in terms of commitments we have made to our customers. In addition to safety, quality, turnaround times and pricing, reliability really is at the heart of our customer value proposition. Reliability has both day-to-day, tactical and longer-term strategic components. At the tactical level, if you commit to complete a particular work package in eleven days, it really should be completed in eleven days. At the strategic level, our customers, including Boeing for the BCF program, need to be able to count on us with regards to long-term commitments to their own customers that are the ultimate owners and operators of converted freighters. As I mentioned, thanks to the support from our shareholders and partners, we were able to keep our team on board throughout COVID. So, we are in the fortunate situation of being able to deliver on our freighter conversion commitments and to gradually grow other business areas of the company in parallel, without having to rob Peter to pay Paul. CF : How much more capacity is there to expand that conversion business? MS : We put into service what is currently China’s second-largest hangar about a year and a half ago, which brought our total heavy maintenance and conversion capacity to over thirty lines. Thanks to the support and trust by our customers, that new hangar is pretty full already. Fortunately, there is still some room for workload growth. Having said this, we are already thinking about further expansion projects in order to address the medium- to long-term growth opportunities of our businesses. CF : That wouldn’t just be for conversion work but for all your business lines, right? MS : Absolutely. Except for engine overhaul, our strategy is predicated on being a full-spectrum MRO provider. This includes the full range of our traditional businesses — line maintenance, heavy maintenance, aircraft painting, passenger-to-freighter conversions, cabin reconfigurations, engine maintenance, landing gear overhaul, component repair and overhaul, composite repair, GSE repair, engineering services, supply chain services and technical training services. More recently, we have also made significant investments into our parts design and manufacturing capabilities. Given the opportunities in the Chinese domestic market and internationally, we plan to grow all of our business lines. CF : Do you see any potential for GAMECO to work on Airbus conversions as well? MS : The passenger-to-freighter conversion market is likely to remain an attractive one in the medium to long term. As you know, Airbus currently has a relatively low market share. So Airbus conversions should represent a very interesting opportunity for future growth. For now, our focus is on delivering on our commitments to Boeing and COMAC. For the future, we are looking at all growth opportunities for our conversion business. CF : Looking into the future, how do you see the conversion process changing, in terms of MRO work? How will automation and robotics be implemented into the manufacturing and MRO processes? MS : One of the key characteristics of the conversion business is the variability across different feedstock aircraft in terms of the configuration and the condition of each individual tail. Feedstock aircraft come from a broad range of different operators with different configurations, maintenance programs, quality of maintenance work and documentation, and different levels of utilization. And, of course, compared to production numbers at Airbus or Boeing, most conversion providers complete a relatively low number of converted aircraft per year. Given this relatively high degree of variability across individual feedstock aircraft in combination with relatively low production numbers, there are natural limits to use cases for artificial intelligence and robotics-based solutions, at least considering their current maturity state. For now, highly qualified and dedicated hangar and shop-floor human teams remain extraordinarily important. Looking a few years down the road, artificial intelligence and robotics are likely to have evolved to a point at which use cases even for conversion work will be much more attractive. We have a number of innovation projects in the pipeline to make sure that we stay at the cutting edge as these technologies mature. In this context, we are very fortunate that we are home-based in Guangdong province and the Greater Bay area, one of the artificial intelligence and robotics innovation centers, not just in China, but globally. This allows us to tap into a tremendous regional innovation ecosystem with an abundance of riches in terms of potential partnership opportunities. Cargo Facts Symposium, taking place live Oct. 25-27 at the Omni San Diego, is the essential event for stakeholders in the freighter and air cargo industry. Learn more and register today to take advantage of our early-bird sale.

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