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

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So, what was it about AEI’s large-door conversions  that made the difference, compared to Cascade’s CRJs? In a word, flexibility. To hear Convey tell it, integrators and other carriers like being able to carry whatever they want. With its smaller door, a package freighter will eventually preclude freight over a certain size. “The words ‘not going’ are death for a package company like FedEx or UPS,” Convey explained. “They don’t like to leave anything behind.”

Those integrators have proven critical to the program’s surge in orders. AEI estimates that around 60 percent of its customers are integrators, with the other 40 percent representing general freight and automotive.

IFL flies Convair 580s out of Miami into the Caribbean region every night, and the CRJ200 is expected to replace that airplane on the longer routes, as they have similar payloads. Convey said that AEI will also deliver conversions to a customer in Europe that’s planning on using it for UPS, “flying some of the northern feeder routes that the integrators won’t operate directly.” Other customers fly automotive and on-demand, general charter flights, special missions, African routes and routes from South Africa into northern countries. In all cases, Convey says, they chose the CRJ200 for its speed and reliability.

It’s worth considering the CRJ200 conversion in the context of its competitors, which is a complicated interaction of economics and engineering. For starters, the CRJ200 is much smaller than its jet competition, placing it in competition with turboprop aircraft. Against the ATR-42F, a popular turboprop freighter of comparable size, AEI’s CRJ200 conversion has a 1.1-tonne payload advantage (6.7 tonnes), and a 650-nautical-mile range advantage (1,100 nautical miles). It also offers the considerable advantage of a large door. The larger ATR-72F has a higher payload capacity, and is available with a similarly large cargo door, but its rage, at just 500 nautical miles, cannot match that of the CRJ.

Then there’s the fact that hundreds of CRJ200s are now entering the twilight of their passenger years, which drives down acquisition costs. According to aviation consultants Avitas, the average cost of a post-passenger CRJ200 is US$2 million – about $1 million less than an ATR-72.

Then there’s the conversion cost itself: $1.85 million each. All things considered, the CRJ200 is about half the price of an ATR-72, but the engines are critical. The jet’s CF-34 engines are expensive and hard to find. “You are seeing prices between two and three million dollars for these things,” Convey said. But, with only about 50 percent of the fleet still flying passengers, there are still hundreds of used airplanes  out there, and hundreds coming off lease or out of service.

Compared to the ATR freighters, it’s all about speed. The ATR’s niche is for routes under 500 miles, where speed is not a major concern. The ATRs are cheaper to fly – but more expensive to buy. However, for flights from 500 to 1,000-plus miles, the CRJ, which doesn’t need to stop to refuel, helps with cutoff times. That, Convey explained, “helps with weather by flying further, higher, faster – like Super Man.”