PODCAST: Avensis CEO Sutter discusses A340, A330 conversions

Jeff Lee
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 Jeff Lee, editor of cargo facts and it’s Friday, the 11th of August. This week, I checked in with Cris Sutter, CEO of Avensis Aviation. which has developed STCs for class E cargo mods on A330s and is now working on its next tier of product, a full conversion for the A340.

Jeff Lee
So how’s it going? It’s been a few months since I saw you in Panama. How have you been?

Cris Sutter
Hey Jeff. How are you? It’s been it’s been busy, as usual, but yeah, very, very good. Thank you. Thank you very much for asking. And thank you very much for, for having me here today.

Jeff Lee
Yeah, thank you for joining us. So, you know, in in Panama, you officially launched your a340. Conversion, your Navis product. Maybe let’s just dive into that a bit more. And perhaps you can start by just taking us back to when this project basically started. What What were you thinking back then, and how long had it been in the works?

Cris Sutter
So, when I think had to take it back, when we started avensis, as a company, we understood that the market was taking an interesting direction in terms of the diversification and diversification of aircraft platforms and, and the type of conversions required. And when it came to the full the full conversion, as we call it, we call it the full because we have different intermediate P2F products in our in our portfolio, but the full conversion with essentially the main cargo door and the cargo loading system was an interesting market at the time, because that there was only multiple mission conversions of aircraft that are designed to take different type of loads or running loads on the floor, which gives a lot of versatility. But as a result of that, you end up with with a relatively heavy baseline aircraft, or a freighter aircraft. And we understood that the E commerce was a market that was requiring it was very, very heavy and volume, let’s say a very bias towards volume but comparatively relatively lower in weight. And we decided to start developing a full main cargo door conversion targeted to the Express market on the platform of a intermediate whiteboard platform that we believe that the time is going to be the most important one the next 20 years, which is the Airbus A330. And obviously the 330s as sibling or Sister Sister aircraft to the 340. Obviously, there are differences in terms of the twin versus quad engine, quad jet engine and ST type certificated and things like that. But essentially, for what we were modifying or developing the modifying the aircraft was the same as it’s the same cross section, same fuselage. So essentially, geometrically, the door was just the same. So we started to develop both programs at the same time. And we quickly realized there was a niche market of operators that wanted to use a 340 for certain specific missions, and they didn’t have a product for a full door conversion and the market is all the attention was geared towards the 330. Rightfully so obviously, because the aircraft with the biggest feedstock was the 340s would be the more niche niche market aircraft. But for us being a agile and flexible company, we realized that our philosophy of family designing and engineering was was perfectly perfectly suitable to do 340 spin off development from the 330. And eventually we secured the launch customer and that’s that’s a program is taking the the Headstart over the development certification for the door program, the 340.

Jeff Lee
Yeah, I was gonna say, certainly the the choice of the 340 is an interesting one. And you are doing both the 300 and the 600. Right?

Cris Sutter
Yes, correct.

Jeff Lee
So how would you kind of compare the two subtypes?

Cris Sutter
Well, it’s interesting because you know, 340 300 as a direct comparison, or direct technical equivalent on the 330 300. So the distances we mentioned earlier about the differences in engine numbers and engine types, but fuselage length stays exactly the same cross section is the same. So it’s a very similar development to the 330 300s. Whereas the 600 it’s a longer aircraft, obviously, different engine options and different payloads and different landing gear. So essentially, is it it shares a lot of familiarities and because it’s still a stretched version of a 300. But to achieve that, that length, which is still until the triple seven dash 9 get start sort of commercial service still, as long as aircraft in commercial service, it makes it structurally wise, very different than the 300 variant. So it’s essentially it’s doing two programs in one let’s say.

Jeff Lee
Yeah, well, I mean, but the kind of feedstock pool, as you say, it’s a bit smaller. Now, how many feasible feedstock candidates would you say that there are?

Cris Sutter
Well, you know, it’s, if you start to scout around the data from different, you know, aircraft, Intel agencies, and you have different variations in numbers of which of them are how many still remain nowadays, and how many are in air worthy condition? How many are, I think the key element here is, how many the reminder feedstock are a sensible business case to be converted, and I will just spin it from that point of view, because technically speaking, there comes a point in the airframe life that if you have to put so much money, you know, go past the check or or, you know, put into maintenance condition that they will make it a sound baseline for a conversion that might not necessarily resist the business case in the end. So I think from that, from that point of view, there is an interesting amount of aircraft that can still be converted to we’re talking about niche numbers, but we’re talking about the region of 30 to 40, aircraft, potentially more than just, and those numbers are modern enough to keep yourself busy for some time. Obviously, it pales in comparison with if it started with 330. But we’re just talking about different different missions of this aircraft and different operator types. So, you know, we all know that an operator that loves to 330 might not necessarily favor the 340 and vice versa.

Jeff Lee
Right. Well, I mean, I know you also intend to basically extend this or eventually move on to the 330, don’t you?

Cris Sutter
Well, yeah, that’s, like I said earlier, the conversation, we started working on both. And we were still working on 330. We have we have interested in on our solution as well. Because from the standpoint of scalability, we have customers already have medius. And they are thinking of upgrading that to navis. So that it’s it’s basically the next the next the next phase for the 330 navis development.

Jeff Lee
So it’s just where are you on the navis for the 340? What’s the what’s the latest.

Cris Sutter
So in program terms and program acronyms that we innovation, we’d love to use, we are past PDR, and we are approaching CDR, which is which is a quite advanced stage of development. Obviously, like I said, we have been developing this solution for some time on our own r&d. Having a launch customer, what it brings is the specifics of an aircraft, MSN and the specifics of a baseline configuration. So then you start to work around that, to move it forward into receiving the STC. So we are roughly around that phase of the program, which is, which is relatively quite advanced, if you take it if you take into account when we announced it, officially. And needless to say, we’ve been working in the background for some time. So

Jeff Lee
I think I saw a picture of what I think is the first aircraft the they painted it in the your customer painted in their colors. So yeah, also you recently obtained the your STC, your EASA STC for medius. Your intermediate product on the A330 300. How would you kind of assess that? And compare that with the 200 which you got certification for Last year was it, it was last year, wasn’t it?

Cris Sutter
Yes, we had an September we got the STC for the the -200 if I remember correctly was September last year. And then we were soon after we had it for 300. I mean, essentially the same aircraft different length. Obviously, you have a major change of the STC, because the longer aircraft different weight and balance obviously in that that drives the change of the STC between 200 or 300. There are minor differences in the ECS system. But I think the all the experience or we we had developing the 200 we just it was direct transfer to 300. So it was it was a quite seamless transition to obtain the STC and both variants and we’re happy to say that we were the only conversion house that created a concept and certified both both ways at the same time. So it was it was for the challenging the challenges point of view. We have two different baseline aircraft. You know, when you start an on a 330, you can either get a classic interior or enhanced interior, which changes some bits and bobs behind what you can see in terms of, you know, brackets and supporting structure that we were utilized for the modification. I think that when we started with it with a classic and and enhancing the 200 and the wind up with it, and enhancing the three hundreds, but I think that other than that it was a continuation of our design philosophy and on the application with different variants.

Jeff Lee
Yeah, so I mean, overall, what’s the kind of demand or each of those types like now and more generally, for these kinds of reversible modifications?

Cris Sutter
I think that for the soul, the first part of the question, the 300, as a 330, has more appeal to operators nowadays, because of obvious reasons in terms of, you know, increase the payload and volume, especially nowadays, that the the yields have come down to more historical value we’re still higher than pre COVID days, but we all knew that the the height of the pandemic was, was driving values that are not sustainable. And at some point, things were going to calm down into more, let’s say normalized, yields and, and cost per kilo, and profit per kilo as well. So that makes it 300 and slightly more appealing platform to operate now, because you couldn’t get more capacity out of it. And I did the day the difference in fuel consumption is not that notorious. When it comes to reversible conversions, I think that our long term plan was always to develop a certified intermediate conversion to provide that flexibility to manage your assets. In terms of if there were freighter demand, you can turn it seasonally into freighter aircraft. If you have pax demand, you can turn into a Pax operating that as a class E without restrictions or use that as a scale up entry level product and flight to generate cargo, cargo revenue, or commercial cargo revenue, whilst the Navis with the full door conversion kit has been manufactured and the aircraft could be induced at a later date. So for our point of view, the strategy was very clear that at some point, the height of the demand for reversible aircraft that we have, let’s say last year, was going to come down, especially when the passenger demand was was picking up again, like like it did, but we were not concerned about it because there was always part of our product strategy, we knew that we couldn’t attack the market from it from an intermediate and midterm point of view. So the the reversible mod still plays a very key role in to our customers or future customers that at some extent will have to wait for a couple of years to get induce their aircraft. That means they can have a freighter available, even if not the ability of loading pallets and containers, but they still have a freighter available to operate it whilst then they can get the waiting list for the upgrade of the door. And that’s something that again, that is not operable in the market other than other than what we can offer as a part of the versus product portfolio.

Jeff Lee
Right. And speaking of waiting, you know, many conversion providers have kind of experienced delays with whether that’s to do with the manufacture of kits, labor issues, all kinds of challenges. How are you? How would you envision dealing with these challenges?

Cris Sutter
Well more than envision, we’re dealing with them on a day to day basis with with our current customers. What I mean by this is, you know, the industry is all interconnected we are well I always say the same thing. We’re a big family. So you know with with the pickup or the sudden, what do you call a sudden by the not really anticipated? Pick up on the passenger demand because all the projections, were talking about passenger numbers that we have today, maybe 2024 and 2024. So it’s been it’s been quite quick to ramp up. That’s put a lot of pressure on new aircraft delivered deliveries that were interrupted during COVID. So resuming a supply chain that was interrupted during COVID It’s not something that it’s just going to turn on and off. So it takes a ramp up time. And that’s the same global supply chain that OEMs manufacturing new aircraft and all of the P2F conversion houses doing whichever product line this is not only applicable to you know, mid size wide body, you know, we have a great relationship with our competitors. They’re doing other other product lines like seven three sevens that we don’t do and You know, discussing sometimes the common challenges is that we are all tapping into the same suppliers for some components. And I think that we are all working together to mitigate situations that you didn’t have availability of structural raw materials, there have been all purchased in advance by the two large OEMs for the next two years, and then that leaves the rest of us in a delicate situation, but then again, that’s a spiral, how you manage the supply chain, and how how you can work together with the suppliers to create that redundancy in the in the systems and, you know, we’re happy to say that we have done a lot of purchasing in advance and a lot of hedging and materials in advance and anticipating our demand. So we could navigate some of the challenges but I think it has to be said that one of the good things about the aviation industry is how resilient we are and how good we are at cooperating with each other. Because you know, from the outside, you can always see that we’re all competing. But in the inside, we all we all cooperating a lot to support each other because you know, if I don’t sell a 737 conversion, because its not in my portfolio, I’m really happy that my competitors are, are able to deliver their products because at the end of the day, they’re supporting the freight industry, which I’m I’m part of. So we all win if we all work together. And I think that that’s, that’s been one of the ways forward within this to manage the supply chain crisis is working together and collaborating. And the same applies to the manpower and human resources as well. So I think, you know, Touchwood, I’m, I’m, I’m happy to say that we haven’t been that deeply affected, but we had our challenges, like most of people involved in doing doing things not only P2F and other other other components for the for the aviation industry.

Jeff Lee
Right, and when you’re evaluating possible facilities, to carry out your, your conversions, we’ve also been hearing about how MRO companies now that the passenger market has rebounded so strongly, they’re kind of prioritizing their resources and preferring in a way more lucrative MRO projects mostly for the passenger side. When you know, in the past, or during the pandemic, they obviously turned to freighter conversion work as a, an avenue for for revenue.

Cris Sutter
Well, that’s an interesting point, I think when when the height of the pandemic, you know, hit the the operation of passenger flights, as we all know, came to a halt. So that meant mros didn’t, they have a lot of workforce and capacity, they just didn’t have anything to fill them up. So P2F became a lifeline to keep those capacity going. Obviously, now there’s a bit of a balancing in the in the request from between passenger return to service or out of deep storage maintenance on top of the normal maintenance of your of your schedules so if you have a flight plan, you have your maintenance schedule to do with your your fleet that is online. And then on top of that you have the conversions. But then again, it’s all to do with with carefully planning things because let’s not forget the fact that the days have that level of urgency during the pandemic that we all had, as in I need your freighter aircraft for yesterday. So you know, we’re all running to get supply chain gear up and then get the conversions up to speed. All that has calmed down and then I can guarantee I wouldn’t guarantee but I can venture that or predict let’s say that’s the right word that this craze now to do quite quick maintenance or like deep storage maintenance, to get your fleet back online to cater for passenger demands that is going to eventually even out and calm down. And then we will end up in this normality where there were slots allocated to seasonal maintenance for for commercial aircraft and passenger aircraft. And there were slots dedicated to we call it heavy maintenance sort of heavy checks similar to what a P2F conversion requires, in our particular case. And again, the door program is something that hits mid to long term. And that’s the difference I want to establish, we’re out of the pandemic zone now. So that urgency is not there anymore. So you need to play that mid to long term ability or capacity request or demands in the right planning so therefore, you know, them mros have the ability to turn around the urgent maintenance request from passenger aircraft and still be able to commit to deliver a P2F conversion line And it’s been a year, year and a half down the line. So it’s all to do with planning. Because at the end of the day you need, we all understand that suppliers are our mros. And suppliers are our partners. And they are now living that that surge in demand from the commercial aviation industry, on the airlines industry that we were actually, they were quite similar to what demands we were placing on them two years ago. So now it’s a moment it’s understanding where the limitations are and working together with them in a carefully crafted planning. So they can they can remain in business and everyone else as well. So I think that that that’s the key element, it’s just a planning and for us, then again, we shifted from the urgent I want the P2F for yesterday to a more planned and carefully coordinated approach. So in that arena, we’re not seeing many challenges for us in particular.

Jeff Lee
Good, well, good and best of luck to you going forward and we look forward to covering your progress as always, and hope to see you again soon. Thank you so much, Chris.

Cris Sutter
Absolutely. Thank you very much. Thank you for having me.

Jeff Lee
That was Cris Sutter, CEO of Avensis aviation. And that’s all 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.