Pandemic feedstock price relief giving 767 conversions an edge

Dedicated freighter demand is likely to persist beyond the return of passenger capacity into the market, and the current reduction in feedstock prices will give conversions a slight edge over production freighters for medium-widebody freighters. Prior to the pandemic, obtaining reasonably priced aircraft for conversion was “relatively difficult,” Tom Sanderson, director for product marketing with Boeing Commercial Airplanes, said during today’s “Air Cargo Market and Product Briefing.” With the drop in passenger aviation during the pandemic, acquiring feedstock for conversion has become easier and less expensive in the narrowbody and medium widebody size categories, which will see preference for 767 freighters “swing a little bit toward the conversion freighter side,” according to Sanderson. [caption id="attachment_109912" align="alignright" width="560"] LATAM Cargo has ten 767-300BCF conversions on the way. (Photo/LATAM)[/caption] Boeing has accounted for the larger role it expects conversions to play in its Commercial Market Outlook (CMO) , in which the company said it now expects 1,720 freighter conversions in the next twenty years, up from its estimate of 1,500 in 2020. Boeing also set a new record for freighter sales as of September, with fifty-three production freighter orders and seventy-four orders for Boeing Converted Freighters, according to Sanderson’s presentation. Meanwhile, narrowbody freighters only available as converted freighters also saw orders surge in 2021, with fifty-three 737-800BCF orders placed as of Sept. 30, according to Sanderson’s presentation. Although no production freighter is available in the size category, the lower feedstock prices “just improve the economics and drive further preference to a conversion freighter in that space,” he noted. While the improved economics for conversions should tip the scales in their favor, operational factors will typically be the deciding vote when selecting a freighter with both a production and conversion option, Sanderson noted. “At the overlap point where we offer both the conversion and the production freighter the capabilities are several tonnes’ different between the two airframes,” Sanderson said. “So if you are driven primarily by volume, you would have naturally gravitated toward the conversion freighter anyway, and that’s now more economical because of improved feedstock availability. And if you were driven toward primary payload capability, you would have been driven towards the production freighter regardless, so that part hasn’t changed.” Josh Collingwood, regional marketing director, market analysis, will present the Boeing Market Spotlight at Cargo Facts Symposium, taking place LIVE Oct. 25-27 at the Wynn Las Vegas. Learn more and register at www.cargofactssymposium.com .

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