Narrowbody freighters III – The conversion market

Today we conclude our three-part analysis of the narrowbody jet freighter fleet with a look at the present and future passenger-to-freighter conversion market.

In Part I we provided a detailed snapshot of the current fleet – the view from 10,000 meters, so to speak. In Part II we analyzed the fleet on a type-by-type basis, and also on an end-user and regional basis. Now we turn to the conversion business…

No narrowbody jet freighters are currently available as new-builds, and there are active passenger-to-freighter conversion programs for only five types: the 757-200F, MD-80F, 737-400F, 737-300F, and CRJ200F. Of these, the 757-200 and 737-300/-400 P-to-F programs are responsible for virtually all the narrowbody freighters added to the fleet in the last five years. The MD-80 occupies a very small niche, and while the CRJ200 appears likely to be more popular, the first unit will not redeliver until late this year.

Both Precision Aircraft Solutions and ST Aerospace offer P-to-F programs for the 757-200, while Aeronautical Engineers, Inc and PEMCO World Air Services offer P-to-F programs for both the 737-400 and 737-300. AEI also has active MD-80 and CRJ200 programs. (Israel-based Bedek Aviation Group holds STCs for conversion of 737-300s/-400s, but is not currently active in this market.) Cascade Aerospace and Bombardier offer  CRJ100 and CRJ200 package freighter (i.e. no large cargo door) conversion programs, but we have not included package freighters in this survey.

The last eighteen months have seen several new narrowbody P-to-F conversion programs launched. AEI went first, formally launching its 737-800 program at the Cargo Facts Asia event in Hong Kong in April 2014, and has been followed by PACAVI and then EFW (in partnership with its shareholders ST Aerospace and Airbus), both with A320 and A321 P-to-F programs. Bedek Aviation Group recently launched P-to-F programs for both the 737-700 and 737-800. In addition to these formally launched programs, Boeing’s board granted the company authority to offer a 737-800 conversion (but has not yet given approval for formal launch), and PEMCO has announced that 737-700 and -800 programs are “under development,” but, like Boeing, has not formally launched them.

While these recently launched programs may ultimately convert significant numbers of narrowbody passenger jets to freighter configuration, it will likely be at least two years before any of them redeliver their first freighter. But they could still have an impact on the fleet in 2017 and 2018, as customers may choose to wait for the opportunity to put an A320 Family or 737NG freighter into service rather than converting one of the older types.

We close with a look at the state of conversion activity. The chart above shows our summary of narrowbody conversions redelivered and scheduled for redelivery in 2015, as well as our estimate of conversions likely to be redelivered next year. As mentioned above, the MD-80F will remain a niche freighter, but demand for P-to-F conversion of 757-200s, 737-400s, and 737‑300s will remain strong for the next two-to-three years. AEI says it expects to deliver its first CRJ200F this year, but it will be 2017 before the type enters the fleet in any significant way. Looking ahead, entry into service of the first freighter-converted 737NGs and A320s/A321s appears likely in 2018, but their numbers will remain small for several years after that.

Read Part I here.

Read Part II here.

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