Birth of a Niche: How small freighters can create big cargo opportunities

Bob Convey had just finished booking two more orders for Aeronautical Engineers Inc. (AEI)’s CRJ200 freighter conversion when Air Cargo World rang to talk about the aircraft conversion house’s   come-from-behind success story. “We always launch these programs based on a combination of gut feeling and industry knowledge and research,” the senior vice president of sales and marketing explained. And when AEI launched the CRJ200 conversion program in 2013, the industry consensus was that the aircraft was dead in the water. “We got a lot of questions about the CRJ200 from people who thought it was an odd choice,” Convey recalled. “Others said that it would never work.”

But Convey and his colleagues pushed on, and shortly after the first press releases went out, the feedback turned positive. Then, the letters of intent started to arrive. “The ‘a-ha’ moment was when AEI quickly racked up 35 letters of intent,” Convey said. “When we started announcing those orders, we got a lot of ‘Are you kidding me?’” But, AEI wasn’t kidding, and over the subsequent months, the orders kept arriving and the company now says it has 54 firm orders and commitments, with more in the works.

AEI’s experience stands as a reminder that conditions and accepted wisdom can change fast in this industry, and that the experts aren’t always right.

Conventional wisdom also says that freight forwarders and integrators don’t care about planes – that market niches determine the necessary aircraft configurations, not the other way around. But in the case of AEI’s CRJ200 conversion program, the uniqueness of the resulting small freighters – with a longer range, a large door, a faster speed and a decent feedstock for conversions – actually helped forwarders discover a hidden air cargo niche, just waiting for the right kind of plane to come along.