Podcast: 777 conversions, narrowbody freighters among CFS 2025 highlights

Jeff Lee
Hello and welcome to another episode of Cargo Facts Connect, the podcast of Cargo Facts, the publication of record for the air cargo and freighter aircraft industries for over 40 years. I’m Jeff Lee, Editor of Cargo Facts, and it’s Friday the seventeenth of October, which means that Cargo Facts Symposium is once again around the corner. With that in mind, my colleague Senior Associate Editor Robert Luke and I got some quick thoughts from four speakers who will be with us at next week’s event. First is Anna Kopinski, director of asset valuations at mba Aviation, who will be joining our 777-focused panel.

Jeff Lee
Anna, we’re looking forward to hearing your perspective of the freighter market at CFS. But as a preview, why don’t you just tell us very briefly how how you feel with the freighter market has performed in terms of the freighter values of the various major families or types?

Anna Kopinski
Yeah. So as an appraiser, obviously, I mean we, we pay close attention to the freighter market and obviously during the pandemic and the years of recovery afterwards. A lot of aircraft are doing very, very well. There’s a lot of freighter demand, especially narrow body. Last year, I think you’ll recall we were starting to see a retraction in lease rates and values on the 7378 hundreds. People were worried that there was too many in storage. We have seen kind of a continuation of that, but that’s driven less I think by demand for that size of aircraft in the freighter world than it is by the sheer value and and market lease rates on the engines for the type. The 7B engines are incredibly popular right now and we are seeing a lot of operators of both freighter and passenger 737 S grounding the aircraft, taking the engines off wing and renting them out for what they can get for them, which is often for two engines more than they can get per flyer. Obviously also the A321 market has been an interesting one to watch. We have seen softening in market lease rates, but not to the same extent as the 737 S, the 737 classics are. In demand, but their lease rates are are are pretty low. They are going to places where they’re finally economically viable option to bring in a an aircraft of the size of the 737400. Interestingly though, even with the rebound in passenger utilization of wide body aircraft demand for wide body freighters has grown over the course of this year. We’ve seen especially on the 777F factory freighter values continue to grow there the A330. Mostly due to demand, it’s very hard to find aircraft that you can convert these days, but that size and category of freighter aircraft is still in high demand. So All in all, while we we’ve seen some, I think we expected some retraction in demand of freighters because we’ve been at such a high, but the data doesn’t seem to support that. Even with tariffs and everything else that was complicating matters, we’re still seeing that e-commerce especially is still Growing and doing well, or at least, creating demand for aircraft of these sizes.

Jeff Leer
Right, right. Yeah, it’s interesting. There are still a lot of unknowns out there. So we’ll see what happens as we go into next year. But when it comes to CFS, what are you looking forward to to hearing about the event?

Anna Kopinski
I mean, I’m on the 777 panel and I’m really actually excited to discuss these things because we’ve been monitoring this aircraft and they are, you know, these converted 777s, only one is coming to service and the other, you know, we’re still waiting on the Toyota Del R, but I think it’s a very interesting space that people are keeping an eye on. Obviously the A330 is the same thing. We know that that something is going into that that 767 replacement space. But honestly I think the the 1st and the last sessions of CFS tend to be the best because you really get to listen to people who work in these spaces very closely talking about how they see the market, how they expect the market to trend. And I think that they the first session usually sets the tone for the rest of the conference. And I think that then we kind of all reiterate towards the end of the conference that, yeah, that was in fact market sentiment pretty spot on.

Jeff Lee
Thank you so much. And yeah, we’ll look forward to having you on the 777 panel and we’ll, there’s lots more to discuss. So see you. See you then.

Anna Kopinski
There’s so much more. See you in a few weeks.

Jeff Lee
Yeah. Thanks, Anna.

Jeff Lee
Also on the 777 panel will be Bill Tarpley, CEO of Mammoth Freighters.

Jeff Lee
Bill, we’re looking forward to having you join the 777 discussion, very specific. But you know, why don’t we as a as a preview, tell us what this year has been been like for Mammoth Freighters.

Bill Tarpley
So, well, it’s it’s been quite an exciting year. It’s it’s of course it’s been a challenge. You know we have 7 airplane and work at the same time and we’re trying to develop this STC and get the final certification of it. It’s, it’s, it’s been a bit frustrating of course with some of the the changes we’ve we’ve encompassed at the at the FAA, some rulings that we’ve received on our stress analysis requirements, et cetera. But overall, it’s been a very pleasant experience. They’ve been, the FAA has been very supportive. They’re communicating well. We’ve gotten their upper management’s attention. It’s been very supporting, but on the other hand, it’s it’s very detailed. And along with that, we’ve had these challenges of of putting this airplane together. You know, we have to conform the first airplane and everything has to be in this place. And so we’re getting all that done so that we can also just repeat that process on the other, the other six airplanes this year. So All in all, you know, very exciting. The the FAA government shutdown just adds a little cherry on the top just as we were trying to get certification before Thanksgiving. I think we’re going to, we’re going to slip out a couple of weeks because of the shutdown.

Jeff Lee
Yeah, hopefully that doesn’t drag out much longer. But the, you know, your prototype 777200 LRMF has obviously been busy flying, just, you know, had been just before the shutdown. But as we, you know, head into the the final few months of this year and into next year, what can we look forward to? What are you looking forward to, you know, in 2026?

Bill Tarpley
Well, one’s a vacation. I haven’t had one in a couple of years, but I we’re looking forward to getting the the SCC still in 2025 and that’ll allow us to finish up and deliver at least six of the seven airplanes we have in work and then the rest of 2026, the first first quarter and maybe sliding into the second quarter will be the challenge of just repeating all of this conformity and certification effort on the 300 Uh. And then of course we had the challenge of the small door. We’re inducting a small door airplane in December, an ex Air India airplane that actually also had auxiliary fuel tanks. So that was another little challenge that came up, but I think part of the other thing we’re looking forward to in 2026 is is expanding Mammoth’s capabilities, you know, besides just doing conversions, we did buy 13 aircraft before we bought the 10 Deltas and the three guitars that now belong to Jetran, but we’re we’re looking forward to expanding our capability to include aircraft transactions and then have our OD in place in order to do other STCS for lots of other different models.

Jeff Lee
OK, interesting. Well, we will have plenty to to discuss at next week’s event. So we are looking forward to seeing you there and thanks again. Good luck.

Bill Tarpley
Yeah. Thank you. That’s it. Look forward to seeing you next week.

Jeff Lee
Next is Hamden Aviation Executive Vice President Dora Alexander, who will be participating in our debate on freighter conversion feedstock.

Robert Luke
Thank you for joining today, Dora. As we reflect on 2025, please share your viewpoints on what you’ve experienced in the leasing sector and what were some key takeaways from what you have not only experienced, but what you have possibly learned as this year comes to a close.

Dora Alexander
Thanks, Robert. Happy to be on here today. Yeah, we’re looking forward to the upcoming event. But as I look back 2025 thus far, I think it’s been a lot of surprises. I think we’re seeing some unpredictability that I guess is a predictable unpredictability. In some ways among the smaller operators, we work with a lot of emerging markets, so no shocker there. But I think we’re seeing a lot shorter planning times that from a leasing perspective certainly have provided us with an extra level of challenge trying to meet the needs of our of our lessees if it’s on a question of swapping out engines or expanding their fleet needs. So I would say that’s probably just a lot of surprises. So we’ve had to be a lot more flexible in terms of how we’re solving challenges, how we’re responding to people’s people’s needs overall.

Robert Luke
OK. And as you look into 2026, what kind of carryover do you expect to see and what kind of challenges and or I would say expectations do you have as far as growth opportunity is concerned?

Dora Alexander
Yeah, I I guess I’m hoping to see in 2026 a bit of mellowing out, a little bit of evening out of some of those, the bigger crunches that we’re seeing all the way through the supply chain, right from parts to new deliveries on the OEM side. That’s really impacted the leasing community. You know we’re we’re looking at every asset wondering, do we pull the engines off, do we lease them out separately. There’s this been kind of this, this, you know this sort of damning impact that that’s holding everybody back from from moving forward. So I’m really hoping that in 2026 we see some of that. You know kind of moving through, I know there’s obviously anyone that works with in pretty much any element of the aviation industry is is suffering in some capacity from the the the stranglehold of of parts right on the part side and that certainly is as well on the on the new aircraft delivery which then pushes down into operators not wanting to sell their their aircraft. So we have you know less feedstock for conversion and and throughout the entire kind of ecosystem.

Robert Luke
Uh, that was that was great insight right there, Dora. Thank you very much for sharing.

Jeff Lee
Meanwhile, we will hear all about 737 conversions from AEI SVP of Sales and Marketing Bob Convey in the narrowbody panel, where he’ll also introduce a new project.

Robert Luke
Give us your take on what you saw throughout this year for the industry, the challenges you faced and what you could say you came and weigh in from a learning perspective gathered as you go forward.

Bob Convey
So 2025 is turned out to be kind of what we forecasted it to be is a very slow intake year in terms of new freighters, new conversions, we are starting to see an uptick in consumption of the narrow body frames, specifically the 800 frames that were converted parked due to lack of demand in late 23 and early 24 subsequently had their engines removed just because of the high value of the engines and leased out or sold. We’re starting to see those airframes being consumed, albeit at a slower rate than we like. They are starting to be consumed and we are hopeful that by mid 2026 and at least up from AI perspective that all of our 737800 SFS. Frames will be deployed or at least under new ownership and away from the companies that that converted them initially. We do expect a little bit of an uptick in 2026 in terms of new orders, but we’re being very conservative as to our our expectations of those new orders. And my guess at this point in time, we’ll see 6 to 10 conversions of 800 SFS in 2026. Maybe a little bit optimistic, but given that the the frames will be for the most part consumed, we we see that as a real possibility. My concerns around that estimate lie with the engines, so that the engines don’t come in line. That will drive feedstock costs and feedstock availability and if the demand is there for the hopefully 6 to 10 conversions, they’ve got to, in most cases, find acquire feedstock on the spot. And again, if the engines are just too expensive, that’s going to be very difficult to do. So a lot of unknowns in 2026, but some some hopes that things do start to recover and we start to see return next year.

Jeff Lee
Yes, Bob, I mean we we have also observed you know a slight uptick in the narrow body segment and it will obviously go into this in more detail at the event with the narrow body panel, but you’ve got several things in the works and some new projects in development, so looks like 2026 will be a decent, at least a decent year for you.

Bob Convey
Yeah, well, we’ve got two new projects in work. One you announced, it’s almost certified. We’re a partnership with KF Aerospace on the 737800 Combi. The first unit’s been delivered to Air Inuit. Certification is expected at the end of October. So hopefully that stays on track. We’ve got decent interest from many different characters around the the world that are interested in operating comedies, and they they tend to be a little more on the edges of normal operators, South America, Central America, Africa. There’s a few players in the US, few players still remaining in Canada that are interested in this aircraft, but our hopes are we’ll see 20 to maybe 30 combis developed over the next 10 years and that’ll that’ll play right into our business plan. But well, we have a new announcement which we’ll actually make just before the cocktail party at Cargofax. So the new product coming, coming online here in a few years, we’re just starting development work on it as we see our our product line kind of sunsetting with the CRJ, the ND80, the 733 and the 734 have kind of run their course and as those fade away, we want to have a a second complementary product to our 800. So that’ll be announced here in another week or so at the the Cargo Fact Symposium in Nashville, Tennessee.

Jeff Lee
Great. Looking forward to hearing more about that and to discussing that with you further. But yeah, in the meantime, thanks so much and we’ll see you in Nashville.

Bob Convey
Good speaking with you guys and look forward to seeing you in Nashville.

Jeff Lee
That’s all the time we have today. But we’ll be covering these topics and many others at next week’s Cargo Facts Symposium in Nashville. Thank you very much for tuning in, and hope to see you next week.