Listen: Two A330 Class E STCs and other market insights

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 state of the used-aircraft market, and how current market conditions are affecting business in the freighter conversion space. The team addresses the certification this week of a new A330 Class E modification product and evaluate it alongside another program currently in development. Listen as the editors assess the two programs, their customers and how much business can be expected for both products. Listen in for a preview of coverage on new developments in Southeast Asia for the week to come. 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 At the time of this recording, it's the day after the unfortunate death of Queen Elizabeth Her Majesty. There's about a 15 minute delay from London Gatwick right now, and another 15 minute delay from London Heathrow according to open source software flight FlightAware. I wanted to begin today with an acknowledgement of that tragic loss, and then spin over to highlighting some experience that we have that I'm not sure that all of our listeners are aware of. Robert, before joining cargo facts, you were a member of Aircraft Sales, and you've done a lot of work with a wide variety of mros. Want to ask you a little bit about that. Well, how do you think this the market for aircraft sales is right now? Robert Luke Well, honestly, it's a good question Drew. Looking at it from my experience and the interactions with the MRO partners that I used to work with. It's really escalating in a positive manner. Right now. You see a lot of business movement, resurging in the freighter side. Of course, with the pandemic giving a boost prior to that, mostly operators and carriers are already considering their transition to newer models, which are now starting to pick up a lot of momentum instead of conversion market as well as even production factory built orders that are coming in. But to answer your question in respect to the mros There's a lot of businesses that are surging through right now, if you don't have a relatively strong network and affiliation with them, you're looking at at least right now a two month wait period for the earliest slot on some of the slots are even extending out to maybe a year possibly two years down the road before any any slots open up for any conversion or regular passenger maintenance overhaul work that is going to be required. I say that's because now you have a different dynamic of aircraft coming into play, where some of your existing regional operation aircraft like the Embraer 190s and various other sorts like even some of the CRJ, two hundreds are picking up some steam to get work done on the passenger side, maybe not so on the freighter side, but you're seeing all these different level of aircraft, one needing if not basic maintenance overhaul are being placed for conversion into freighters themselves. And another portion that will probably speak on is the E Class STCs, which are also gaining some momentum as well. But just from that understanding and knowledge alone, it's very busy right now normally is around this time of the year as most airlines whether their cargo or passenger operators tend to place the aircraft into service in preparation for the fourth quarter push, which is usually the holiday seasons. So yeah, it's pretty busy. It's very strong. The market has revived passenger services picking up to normal levels. And so they're seeing a lot of business heading their way from the MRO perspective. Andrew Crider You mentioned Class E STC's, and I believe we got a brand new Class E STC for the A 330 Earlier this week, isn't that right, Jeff? Jeff Lee That is correct. So this is the start of I would say a trend. That is a development from all the passenger freighter reconfigurations that we saw starting in 2020. But of course, the easa exemption for those temporary modifications expired at the end of July this year. And so knowing that that deadline was coming, a few companies started looking at more permanent modifications that wouldn't be limited by that deadline and the exemption. And so what we have here this week is avensis aviation, UK company that we talked to last year, they basically started developing what they called it basically a multi tiered portfolio of modifications. So the lightest one, obviously, was the removal of seats that many airlines did. That's gone now. But the second one, which is the one that they just got the approval for, is what they call the Medius modification. And what that involves is basically turning the main deck passenger compartment into a Class E cargo compartment. And that means they get rid of all the passenger cabin monuments like the lavatories, the galleys, all those they added smoke a fire lining, the added smoke detection. What they didn't do is add a large cargo door and a full cargo loading system, of course, because that doesn't that's why we call these modifications and not freighter conversions. But what they hope to do is basically offer customers sort of halfway alternative given that there are long wait times for all conversions, and the fact that the process itself is pretty long one, this one, this modification is also reversible. And it takes between one to two months to do but this is this first one is targeted at the A330 which is probably the one the one model that on the passenger side is has seen so many retirements, we know there are so many 330s parked Andrew Crider Where are they doing these modifications? Jeff Lee They they launch customer for this is TAP air Portugal, and actually TAP air Portugal's started working on the aircraft its own MRO facility in Lisbon. Andrew Crider So you have a choice of Lisbon or Luxenberg for STC Jeff Lee No, it depends on what obviously where you are where the customer is, because avensis and its engineers will come to your facility. And they'll basically guide you through the modification process. So, of course, this was in Lisbon because this was TAP air Portugal. And I'll get onto Luxembourg in a minute. But the this first aircraft a330 200. This is one of the two that TAP air Portugal painted, or added cargo branding to. And so this, we should start seeing this one start flying pretty soon. I haven't been able to get any pictures of what it looks like inside. But yeah, the the TAP Air Portugal, of course, used these A330 200s, as well as a couple of a330 900s took out the seats from a couple of those as well. So it's interesting, and we'll see whether there are any more customers for this. And, of course avensis has the next tier planned, which is a full freighter conversion, but we'll see what happens with that. And I was going to say that they're the first company to get a Class E modification for a330s. Approved. Now, Luxembourg vallair, based in Luxembourg, announced earlier this year that they are also working on a modification a Class E modification. But for the A330 300. They haven't got the easa approval for that. But they did say that it would be they said in July there would be in the next few months. So they're already working on the first two aircraft at vallair's new facility in Chateauroux. And so this one, I mean, I don't know exactly how different it will be. But I do know that they are envisioning the use of some kind of conveyor system that comes with the modification, basically, to help speed up the loading process because of course, you don't have the large cargo door. So we I mean, we're we're looking forward to seeing when that one gets approved and what it looks like. Andrew Crider But does medius have any conveyor system or anything that would stand stand out as far as a class e STC for the 330 Besides the vallair model, because I mean, you have both of these, these mros Not even MRO it's a firm that I guess might travel to you or give you a kit that you can install your at own mro verse Vallair. I'm, I'm trying to see about that, about that market, how these would differentiate and Robert please chime in if you if you think you you might know from from the sales perspective of how you would sell this. Robert Luke So that's a good question Drew. And, you know, that was part of the question I was going to frame so thank you for segueing that in, you know, Jeff Just based on your understanding of this concept, it sounds like even with the conveyer system, it's more or less going to be applicable or beneficial to like small packaging or ecommerce delivery. Because, you know, if you're talking about palletized, loading structures, you need the cargo door and cargo loading system to be able to one load the aircraft up appropriately and safely. But also to do it in a expeditious manner. So, one, my question is, what is the, you know, viability of this product? Is it just a short term component that they're just doing for now? Or do they believe that there's a long term future prospect for the development of this and that it can actually generate interest that will allow many operators to benefit from this s from this E Class STc? Jeff Lee No, I mean, you're right. This is clearly targeted at lightweight packages, ecommerce, that business. And I mean, it depends on how the market turns out, because one of the selling points, I guess, is that this is a reversible modification. And so, you know, if you have an A330, that you can't find a use for on the passenger side at that moment, then, you know, you could think about doing this modification to it. And maybe you know, earning some good business on the cargo side. But what I was gonna say was that avensis actually does have a second customer for medius. And that, of course, is AELF Flight Service, which has a bunch of older A330s. A330 200s. And actually, they just confirmed to me earlier today that they have two aircraft earmarked right now, and they have one undergoing the modification that's going to be completed in the next couple of weeks, possibly, and then they have their second one following next month. Robert Luke So does that mean, sorry to interrupt. But when you said reversible, I'm picking on piggybacking off of that statement, does that mean that this is more or less like a quick change format, or once you convert it from passenger to the E Class STC variant? You that's it's in this permanent makeup at that point? To just only operator? Jeff Lee Yeah you're right. I mean, it's, you're not wrong in thinking about these as kind of quick change. But of course, those do the quick, the Quick Change aircraft that we normally talk about are the ones that do have a cargo door, right. So the but in some ways, yes this is a quick change. And that's what I mean, when I say reversible. So you know, all it takes is six to eight weeks, and then you can turn basically turn your A330 back into a passenger carrying machine. So there is a certain appeal to it. Especially if you have a large number of possibly older a 330s. That you may not need or want to use on the passenger side. And you know, it's with lightweight packages. I mean, it's still, you can still carry a decent amount. But that depends on how good the market is, how strong the market is. Robert Luke Yeah, the strength of the market. And then also, two things that are sticking out that I'm sure they're working on, as they try to, you know, promote the STC, you know, the three to four week turnaround time to reverse it back to passenger, if a carrier decided to do that, that's three or four weeks of not making money. So now that airplanes on the ground for another month to convert back and then to how quick will the conveyor system allow them to load up ecommerce packages for delivery versus just having a cargo door unloading system? You know, is there a benefit to that? Or is it at least close to the loading? Jeff Lee We don't know. But that's these are all, you know, factors that come into the equation of whether you want to do this or not. And then of course, there's the actual cost of the modification itself. But, you know, at least right now, the market still seems like it's strong enough. And one other thing I was going to say was, we have seen that there's at least one or two other players that are looking to do this and I talked to Eastern Airlines, they are also developing a Class E modification for triple sevens. And they've got two aircraft already undergoing they're gonna do the modification in Kansas City. And they were exactly and I mean, yeah, that's so they're also banking on the market staying strong when they eventually get that approved. But in kind of, similar to avensis, Eastern is also planning an additional layer of modification after the class E. But we will. We'll see. And we'll look out for possibly a story next week on that. Andrew Crider Certainly Well, this is all very interesting. And I know some of our listeners might be interested. So I wanted to point out that we'll be providing updates on all these class E STCs, including the Class E for the a340 type, which I'm particularly excited about, and posting regularly on cargo facts.com. For more market insights, I want to draw our listeners to cargo facts consulting or CFC insights.com, where you can find more in depth coverage of market forecast and other crucial insights for players in our market. But really quickly before we end, Jeff, don't we have another hint of something that might be stirring in Southwest Asia? Jeff Lee Southeast Asia, Yes. And we've been talking a lot about Southeast Asia when it comes to 737 Classics. But next week, we might have a story that is about Southeast Asia but isn't about 737 Classics. And I have an interesting video of said development. So yeah, we'll look at that next week. Andrew Crider We certainly will. That's all the time that we have for today. For those of you listening thank you for tuning in to cargo facts Connect. For more multimedia content like this, check out cargo facts.com and search cargo facts connect on iTunes and Spotify. Thank you again. Subscribe to Cargo Facts Connect on iTunes or Spotify , or download the episode on Transistor . Cargo Facts Symposium, taking place LIVE Oct. 19-21 at the InterContinental San Diego, is the essential event for stakeholders in the air cargo industry. Learn more and register today .

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