Next-gen narrowbody conversions accelerate as adoptions pick up steam

Two years into the COVID-19 pandemic, the freighter market continues to outperform expectations as an increasing number of carriers looks to launch freighter operations of their own using narrowbody conversions.

As we predicted in our April 2021 analysis, the addition of 737-800Fs was once again the predominant driver of growth in the worldwide narrowbody jet freighter fleet. But the contrast between the -800 and its predecessor the -400 was even more pronounced this year, with the number of in-service -800s jumping up by thirty-eight and the -400 total remaining static compared with a year ago.

As ever, this analysis strives to be as accurate a tally as possible, but inevitably may contain omissions or errors for various reasons. Our definition of “narrowbody freighter” here does not include 707Fs, DC-8Fs or regional freighters like ATRs and CRJs; it does include Quick Change aircraft that are in freighter configuration, 737-700 FlexCombis, DC-9Fs and MD-80Fs.

The table below shows the narrowbody freighter aircraft in service as of the end of March 2022. As with last year, we have consolidated the operator list by grouping together carriers that belong to, or are affiliates of, the same group. This includes DHL Express and its own carriers; the LUSAT group; and Northern Aviation Services, for example.

Click on each column header to sort by ascending or descending order.

Cargo Facts counted a total of 792 narrowbody jet freighters in service with ninety-six carriers or groups as of March 29, 2022. While in pure number terms this represents just a 3.9% year-over-year increase compared with the 7.5% growth twelve months ago, the diversity of operators has continued to widen with eight more operators joining the list.

The total would be slightly higher were it not for Russia’s invasion of Ukraine in late February and the ensuing international sanctions now in place. In fact, Volga-Dnepr Group announced in March that it had suspended all of its flight operations with Western jets as it works with lessors and regulators to find a way out of the crisis.

The suspension means that the fleets of Atran and CargoLogic Germany are no longer included in our tally, accounting for six 737-800BCFs and four 737-400SF with the former and four 737-400SFs with the latter.

737-800 influx takes active NG freighter fleet to 100

But the change in numbers alone fails to tell the whole story of evolution in the narrowbody jet freighter fleet around the world.

Most notably, the output of the three 737NG freighter conversion programs has continued to accelerate, with ninety 737-800Fs in service globally as of March 29 — almost double the total of a year ago.

In fact, more generally, as the fourth anniversary of the certification of the first 737-800 freighter conversion in April nears, the number of 737NG freighters in active service around the world has now reached the 100-unit milestone.

Boeing’s 737-800BCF program certification in April 2018 followed Israel Aerospace Industries’ (IAI) 737-700BDSF certification in the second half of 2017.

Since then, three more conversion programs have obtained approval and 737NGs now come in five variations: IAI’s -700BDSF, PEMCO’s -700FC, Boeing’s -800BCF, IAI’s -800BDSF and Aeronautical Engineers Inc.’s (AEI) -800SF.

Cargo Facts counted a total of 100 737NG freighters in the active fleet worldwide as of March 29. These aircraft were in operation with thirty different carriers.

Of the -800s, the BCF program has to date produced the most units by far, with sixty-six freighters in service. Aircraft that have completed conversion but not entered service are not included in our count. 737-700s are far less ubiquitous, only having two conversion programs that have produced ten units in total: eight BDSFs and two FCs.

While Amazon’s own-branded aircraft made up around 35% of all 737NG freighters a year ago, as of late March the retail giant’s twenty-six dry leased 737-800Fs accounted for exactly 26% of the global 737NG freighter in-service fleet.

Eleven more carriers have become 737NG freighters since March 2021, and Cargo Facts is already aware of several more that will soon join the list. They include: Canada-based WestJet, whose first 737-800BCF on lease from BBAM was seen fully painted in Guangzhou (CAN) mid-March; Tunisia-based Express Air Cargo, which will double its fleet with the addition of two 737-800SFs; and South Korea-based Jeju Air, which will enter the freighter market with one 737-800BCF.

With thirty aircraft, the U.S is the country with the most 737NG freighters, while Europe has the most as a region, with thirty-six units divided across twelve different operators.

Georgia’s three 737NGs have a surprising amount of diversity, each having a different STC and with a different carrier, making the country the third to have at least three operators with 737NG freighters after the U.S. and China, and the second with conversions from more than two different STC holders after the U.S.

The number of 737-800 freighters will grow even faster in the year ahead.

AEI boosted its 737-800SF conversion capacity in 2021 with the addition of a fifth conversion site at the HAECO Xiamen facility, joining the Taikoo (Shandong) Aircraft Engineering Company (STAECO) facility in Jinan (TNA), the Commercial Jet facilities in Dothan (DHN) and Miami (MIA), and the KF Aerospace facility in Kelowna (YLW).

AEI recently received regulatory approval for its 737-800SF from Transport Canada and the U.K. Civil Aviation Authority, and told Cargo Facts it was also seeking approval in other countries, including Brazil, Malaysia and Indonesia.

Boeing, which only passed the fifty-unit milestone in 2021, is well on track to surpass 100 737-800BCF conversions in 2022, given that the planemaker could have up to fifteen 737-800BCF conversion lines by the end of the year, including new locations at the Cooperativa Autogestionaria de Servicios Aeroindustriales (COOPESA) facility in San Jose (SJO), Costa Rica, and Boeing’s maintenance, repair and overhaul (MRO) facility at Gatwick Airport (LGW).

Boeing had received orders and commitments for more than 200 737-800BCFs from nineteen customers in December 2021.

IAI, for its part, began its first 737-800BDSF line at the Atitech facility in Naples (NAP) in December 2021, joining conversion sites in Tel Aviv (TLV), Yichang (YIH), Tianjin (TSN) and Mexico City (MEX).

Airbus narrowbodies on the rise 

Apart from 737NGs, Airbus narrowbody conversions are also gaining momentum. Just over two years after the initial flight and certification of the first freighter-converted A321F, two programs have completed a total of eight aircraft, with at least another eight to ten set to exit conversion and a third program expecting certification by the end of 2022.

The first A321 conversion took to the sky in the early days of the pandemic in January 2020, with Elbe Flugzeugwerke (EFW) receiving its supplemental type certificate (STC) from the European Union Aviation Safety Agency (EASA) in February 2020. The Federal Aviation Administration (FAA) validated that STC a few months later.

321 Precision Conversions obtained the STC for its A321-200PCF conversion from the FAA in April 2021 and redelivered the prototype aircraft (891, ex-Air Mediterranee) to Vallair shortly afterward.

As of the end of March 2022, there were eight A321-200Fs in service, consisting of seven EFW -200P2Fs and one Precision -200PCF.

There are a couple of points that should be noted:

• With the exception of unit 3504, all of the A321Fs were built from 1998 through 2001.
• Qantas is the only operator with V2500 engines so far.
• All seven of EFW’s conversions were carried out at the ST Engineering facility in Singapore (XSP), while 321 Precision Conversions’ unit was converted at the Avocet facility in Sanford (SFB).
• EFW, a joint venture between Airbus and ST Engineering, has steadily increased its output for A321P2Fs to address customer demand by adding conversion lines in Guangzhou (CAN) and San Antonio (SAT).

Since EFW’s original certification, A321P2Fs have been accepted in significant numbers by a variety of customers. The largest current customer, BBAM, announced eighteen slots with EFW in August 2021. The San Francisco-based company has already leased two units to Titan Airways and one to Lufthansa.

Other known customers with A321P2F conversions on order with EFW include Castlelake, Titan Airways, Fuyo General Lease, Vallair and SmartLynx.

Meanwhile, 321 Precision Conversions, a joint venture between Air Transport Services Group (ATSG) and Precision Aircraft Solutions, recently began its first A321PCF conversion at the HAECO facility in Xiamen (XMN) — its first site outside the U.S. — adding to the Avocet facility at SFB, the PEMCO facility in Tampa (TPA) and the HAECO Americas facility in Lake City (LCQ).

Precision’s known A321PCF conversion orders include: two from Cross Ocean Partners; four from a joint venture between Aerovista and Petrus Aviation; six from a joint venture between Greenwich Highland Aviation and Zetland Capital Partners; and at least three from Cargo Aircraft Management (CAM).

With six aircraft in conversion along with six recently ordered slots of its own, SmartLynx is establishing itself as a frontrunner and will operate the largest quantity of A321Fs, at least based on current known orders. Four of those are on lease from GTLK Europe, while two are from Cross Ocean Partners. The carrier had previously told Cargo Facts that its target was to have eight A321Fs by the end of 2022.

Although there are several more units with V2500 engines on the list, the CFM56 engine continues to account for the majority of the A321-200s currently being converted or scheduled for induction.

In terms of the ages of the aircraft being selected for conversion, there is now a much broader range, varying from 1998- to 2008-vintage.

The conversion sites have also grown in number and diversified, with various lines operating in Singapore, China and the U.S.

There will soon be a third A321 freighter STC holder, with Sine Draco expecting certification of its A321-200SDF by yearend. The company inducted its conformity aircraft in Tucson (TUS) in October 2021.

Apart from A321s, March also saw EFW emerge with EASA approval of its A320P2F STC, unlocking another avenue for Airbus narrowbody freighters. EFW won’t be the sole A320 converter in the market for long; C Cubed Aerospace, which inducted its first A320-200 for conversion in September 2019, is nearing flight testing for its new conversion and hopes to have its STC approved by yearend.

Previous-gen conversions hold their own

Meanwhile, even as 737NG and A321 conversions ramp up, Cargo Facts has still observed a healthy level of activity surrounding 757s and 737 Classics.

Despite previous rumors of the imminent decline of the type, the 757 has continued to see increased conversions and operators. Samaritan’s Purse was the latest to add a 757-200PCF to its fleet and will become the newest operator of the type in North America, but the narrowbody has already found its way into another new operator in the region; after a slight delay, Miami-based Amerijet began flying its first 757-200PCF in March and will quickly deploy five more in the weeks ahead.

Elsewhere, Kenya-based Astral Aviation took the first of three 757-200PCFs but has yet to start operating it.

China is home to the second-largest number of 757 freighters after the U.S., with SF Airlines, YTO Cargo Airlines and North-western Cargo International Airlines all continuing to add more units to their respective fleets.

AerSale has been a major source of recent 757 conversions, having purchased twenty-four ex-American Airlines units in the past two years. The company has now topped up its six conversion orders with Precision Aircraft Solutions by adding at least six more.

Precision Aircraft Solutions, which recently completed its 150th 757-200PCF cargo door, told Cargo Facts that the demand for 757s is currently so strong that the company may surpass 180 total conversions.

On the 737 Classic front, although the number of -400s has stayed the same at 161 and the number of -300s has dipped slightly, the past twelve months still saw plenty of transactions involving these aircraft.

One effect of the growing adoption of 737NGs has been the release of 737-300Fs and -400Fs from the large fleets of various operators like China Postal Airlines, ASL Airlines and West Atlantic.

As was the case last year, Southeast Asia — especially Indonesia and Malaysia — continues to be a major recipient of 737 Classics. Rimbun Air and new carrier Black Stone Airlines each added a 737-300F in early 2022, taking the number of 737 Classic freighter operators in the country to six, while My Jet Xpress picked up at least one 737-300F that YTO had removed.

Mexico-based Aeronaves TSM is noteworthy because it is now Mexico’s third 737 Classic freighter operator and could soon be the country’s largest, given it has ordered at least seven 737-400SF conversions with AEI and acquired multiple other 737-300s and -400s. The carrier recently began flying two Mercado Libre-branded 737-400Fs on an ACMI basis for the e-tailer.

While it may be true that the pivot to 737NG conversions has well and truly taken place, not all carriers have been so quick to jump onboard. Chinese operators SF and YTO recently told Cargo Facts that they had no plans for next-generation narrowbodies yet, with the former not expecting any retirements in 2022, and the latter still finding 737-800 feedstock prices too high.

It is clear that — at least as far as 737 Classics and 737NGs are concerned — the inflection point is not far off, even if the two types do not quite reach parity this time next year. It is almost certain that the number of operators will keep expanding as more players look to diversify their revenues, and at least two more Airbus conversion programs expecting certification by the end of 2022 will add even more variety to the narrowbody segment in the year ahead.

This story originally appeared in the April 2022 issue of Cargo Facts.

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