Listen: Amazon, Embraer and drones

In this week’s episode of the “Cargo Facts Connect” podcast, Cargo Facts Editor Jeff Lee and Associate Editors Andrew Crider and Robert Luke discuss the launch of Quikjet Cargo Airlines, which has obtained its air operator certificate and may soon start service with an Amazon-branded 737-800BCF. Additionally, Embraer has provided an update on its E-Jet conversion program, cutting the first piece of what will become part of the first large cargo door for the new freighter type. Meanwhile, Drone Delivery Canada is progressing in flight testing of its large Condor drone. Tune in for a discussion of these topics and more for the week ended Dec. 16, 2022. 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, associate editor of cargo facts. Robert Luke And I'm Robert Luke, associate editor of cargo facts. Jeff Lee And I'm Jeff Lee, editor of cargo facts. Andrew Crider I want to begin today by switching the desk over to Jeff, there was major news on the E commerce and Amazon delivery front. Jeff Lee That's right. So it looks like Amazon will soon be starting freIghter operations with a 737 800 BCF fully painted in Amazon colors. In India, because India's latest freighter operator quick jet is now certified and got its AOC approved by the Indian authorities. And we've known that there were at least 2 737 800 BC F's that were eventually going to be joining the quick jet fleet. We saw one of them painted and with the quick jet titles. In China after conversion, it was there for a while. But basically both of these seven three sevens made their way to India in the past couple of months. And last week, one of them had the other one that wasn't in China made a series of test flights, certification flights. And some local spotters had taken photographs. And they showed this airplane in the Amazon colors. And like all of Amazon's other partner carriers. This one had the name of the operator near the front Quick jet. But what is interesting and different is that this one isn't an aircraft, dry leased by Amazon. All of the other seven, three sevens and seven, six sevens that are in Amazon colors are dry leased by Amazon and then handed over to whatever carrier for CMI operations. So that's one difference. But I guess they probably just testing things out and starting off with an ACMI deal with quick jet. And what isn't too surprising is that quick jet, of course, belongs or is part of the ASL aviation holdings group, which already operates 737 800 BCF's and SFs in Europe. And those are dry leased by Amazon and being flown on a CMA basis. So yeah, we'll see when they actually begin flying, but it is interesting. And of course, India is is pretty huge e commerce market. And we were seeing all kinds of operators in India expanding or starting freighter operations for the first time. So, yeah, that's we're seeing a lot of growth in that country. Robert Luke I want to just interject here and thank you for sharing, Jeff. Have you guys really been see what's been developing over the last couple of years, even though the larger companies like Amazon, FedEx, UPS, AASL, Atlas, all of these guys have probably been implementing these strategies for quite some time as far as putting pen to paper. But they are moving from the dense populated areas, and they're stretching their arm of logistical support out into the untapped markets, whether it's Latin America, whether it's Africa, and whether it's India, but they're not doing it direct. I'm noticing that the formation of partnerships with local carriers and the CMI arrangements are allowing all of these companies to really collaborate under clicks if you will, the Amazon click the DHL click the FedEx click the, you know, Alibaba click to provide ample surplus, free capacity as they transition from the old payload structure into this new deliverance of express shipping in E commerce. So it's very interesting how you're seeing these markets being flooded, which kind of explains why they weren't necessarily panicking when the peak demand for air freight started to kind of dwindle this year. What are your thoughts on that? Andrew? Andrew Crider I think, it makes me more think of Mercado Libre is a growth in Latin America, because they've used a number of different partners to expand into that region. We haven't necessarily seen a it when we did see the launch of freighter ops from gol airlines. And Jeff, correct me if I'm wrong under that that model, but I I think that this being an Indian operator is more is more unique because that country in that in that region have just been epicenters of tremendous freedom growth? Jeff Lee Well, yeah, and and because of all this growing demand, especially outside of the main population centers and hubs. That's why we're seeing a lot of growth in the narrowbodies segment, as well as the regional segment, right. And in India, you know, all of these additions that we've already seen, and upcoming additions that we'll see next year. All of these are narrowbodies. And actually, they're all either 737 ngs a320s or 321s. Robert Luke And here's another key thing I noticed too, and this is something I want to I want all of us to keep our eyes on. I just saw recently, CMA CGM is ceasing operations, direct service of their triple sevens, right. But yet, and still, they were immediately able to put them under DHL, and start putting in keep them in work and keep them in operation and keep revenue generating, that just showed me that what analysts are predicting are is really not going to be the end result as far as the freight market is concerned. Because as we get away from the tri and quad engine freighters, the twin engine wide bodies and medium wide bodies are going to have more than enough workload to keep themselves generating even if the direct operating or operators that own the aircraft are not providing direct services. What I wanted to say, what are your thoughts on that, Jeff? Jeff Lee Yeah, well, let me say if as the with CMA CGM, let's be careful about our wording that the first of all, they're not ceasing operations of their triple sevens. They're just temporarily suspended. So they're flying them for other people. They're flying some of their freighters for other people. And actually, that's that has been going on for quite a while. And they still remember we earlier this year, we had that story about one of their ex Qatar 330 200 freighters flying for Qatar, even after it went to CMA CGM. And so yeah, for months, it seems like CMA CGM hasn't really known what to do with with their phrases. That may be a bit be a bit harsh. But yeah, it is strange that they're flying all these freighters for people like Qatar and DHL, and I don't know why. Robert Luke But the good thing about it is, is even as they identify or align their strategy, so it kind of allows them to map out their own direct service for their clients. They're able to still keep the aircraft operating, which is what you said they've been doing previously. So again, I'll you know, retract my initial statement and just say that their intended plan to provide their own direct service for clients that they currently serve, is still hasn't taken place yet. We're still waiting for that. Jeff Lee We can say that they, they haven't achieved their what they originally intended to do to the full extent, at least, with their with their freighters, but, but yeah, at least they're able to fly them for other people. So you know, the question is, are they just going to become mostly another ACMI carrier, another ACMI operator? We'll see. Robert Luke But even then, that's not a bad thing, because you know, there's enough demand out there to at least keep those aircraft operating. So I don't know if it's ideally what they would like to do, but it's still allowing them to function nonetheless. Andrew Crider If I can steer us back into the regional category. I think there's another major news item that we want to discuss and that was the Embraer they announced that their first e 190. Passenger freighter conversion, which is well underway ahead, they'd cut the first metal piece of the structure of their main cargo door. And that conversion project is currently on scheduled for delivery in 2024. And the reason why I think that that's important to interject because there's going to be, as Robin mentioned earlier, the E commerce prayers we know ecommerce relates a lot to the regional transport. What are your What are both you all's takeaways about the e 190? Program? Jeff Lee Oh, well, yeah, it's definitely interesting and good to see they them passing this milestone of the first component, I guess, of their conversion program. And it just shows how long the processes and all the planning that has to take place. If they're, you know, this, they're still on track for 2024. But, you know, production and everything has is already underway. But the Yeah, this, the e jet conversions. According to Embraer, at least do have a place in the market because they fill that gap between the large turboprops and smaller narrow bodies like the seven three sevens, but we haven't really seen maybe as many orders as they had expected. What they just haven't announced them. I don't know. But Robert Luke and I think yeah, just to add piggyback onto that, milestones, definitely great. So kudos to Embraer. But I'm not saying this is going to happen. But I think they'll see a growth spurt rather in conversion orders for the freighter type, as operators finally put to bed, the beautiful 737 Classic, which has been a workhorse for so long, particularly the 300 variant. I think that that would be this kind of like if we had to compare. It would be like the A 350 and the triple sevens kind of filling in for the seven four. I think that's what you'll kind of see not in huge ways, but you'll see a significant amount of conversion is taking place where e190s will be a justifiably suitable replacement for 737 3 hundreds in certain areas and regions of the world. So I think that's probably where you'll see a noticeable uptick in conversion orders when those aircraft stop to officially retired. Jeff Lee Yeah, I mean, there's certainly a whole bunch of E Jet operators around the world and especially in some regions. So maybe we'll see. Some of them kind of take the plunge and commit to it or we'll see more leasing companies commit to these conversions. Andrew Crider One final question I want to make sure that we get in before we run out of time. This involves another news item that we didn't get the opportunity to mention yet. But that was drone delivery Canada, providing an update on their test flights. Now these are tests flights for their Condor drone, which is much bigger than their current series of drone offerings. A Condor offers a large payload confident 80 kilograms and a range of 200 kilometers I haven't had an opportunity to convert 10 nautical miles yet as we traditionally publish on cargo facts, but the reason why I bring that up is that is a that's a significant payload for in the drone space. And we were just talking about the e 190, which has orders from astral and astral has also started their own drone program on your astral aerial, which is which is producing drones. I wanted to ask you both. Do you see a world where drones really eat into regional freight or market, Robert Luke there's a distinct possibility in a reality that they will, what the portions of percentage will be. That's yet to be determined, because again, you still have to kind of work through all of the initial stages of development, production and troubleshooting getting into that operational rhythm, I'll call it before you can actually determine how much of an impact the actual drone will make into that into that particular market. Jeff Lee Yeah, it's I think it's interesting because we, with the e jets kind of taking the upper end of the spectrum and drones taking the lower end of the spectrum. It seems like there's overlap on on both sides for the traditional regional and turboprop segment. But I mean, even with the older drones, there's such a wide variety in terms of size and payload. And is the market big enough? Is the growing market going to be big enough? For all of these placyers? Robert Luke And adding to that, you know, what kind of an impact will drones actually have now that I've given it further thought if manufacturers like ATR and Saab, for example, and De Havilland say, you know, we're going to now automate our aircraft. So you can either have one single pilot operating, which I will reserve my opinion on that but for safety reasons believed that more research and end to end testing needs to be done before they finally make that decision. And or, like we're seeing with the Cessnas before they're now make able to make those aircraft basically UAVs that can just fly themselves with the same payload and cargo capacity that is being conducted with a two man crew. I mean, there's another angle we probably should consider as we dive into an answer for that question. Andrew Crider Certainly something for us to consider. But on this, that is all the time we have for today. For more multimedia coverage 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 . Cargo Facts EMEA, the essential event for stakeholders in Europe, the Middle East and Africa, will take place live Feb. 6-8 in Dubai. Register today to take advantage of early-bird pricing.

Listen: Amazon, Embraer and drones

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