Conversion conundrums

The 2015 edition of the Cargo Facts Aircraft Symposium is officially over, and the speakers, delegates, and sponsors are flying back to their homes in Asia, Europe, and North and South America.

We will publish a full report on the Symposium, the most successful and enjoyable in recent memory, in the next issue of Cargo Facts, but for today we look at a couple of questions that arose during the sessions devoted to the freighter conversion market. Questions to which the answers seem to be confusing, at best.

First, on the widebody side of things, some of the issues many expected to be contentious turned out to be almost non-issues, as the panelists were in general agreement.

• The death of freighters? Hardly.
• Main-deck vs belly? We need both.
• Aircraft age limits a threat to conversions? Not a problem.

This last one led to the general subject of widebody freighter conversions, and the more specific question of “We’ve got programs in place for the medium widebody 767 and A330, but what about large widebodies? What comes next?” The obvious answer, of course, is the 777, and while no programs have been formally launched, speakers representing both Boeing and Bedek/IAI confirmed that their companies were actively working on passenger-to-freighter conversion programs for the 777-200ER.

So far, so good. But the following morning, during a session featuring a panel of appraisers, moderator Bert van Leuwen put up a slide devoted to the current and future values of, and conversion prospects for, the 777-200ER. Across the top of the slide, above the chart showing the panel members’ opinions regarding value, was a line of bold type, in red, with words to the effect of “Conversion potential? Unanimous panel opinion: None.”

In the discussion that followed, the appraisers all agreed that while P-to-F conversion of the 777 would pose tremendous technical challenges, there was no question that these challenges could be overcome. But they also all agreed that a 777-200ER freighter, whether from Boeing or Bedek, was an aircraft for which there would be no buyers.

More than a slight gulf there.

Now, on to the narrowbody market. We start by going back to the widebody panel, during which Moshe Haimovich, IAI/Bedek’s Director, Marketing and Business Development, announced that the company was working on a conversion program for the Airbus A320 and A321. Not formally launched, but under strong consideration.

Fast forward to the session devoted to narrowbody freighters, during which Gary Warner, President of Precision Aircraft Solutions, hinted (more than once) that Precision was working on a new program which would ramp up as its current 757-200 P-to-F program wound down. This new program is several years into the future, of course, and there was no mention of a specific aircraft type under consideration, but, let’s assume, for purpose of this discussion, that it will be the narrowbody aircraft closest in size to the 757 which Precision currently offers. That leaves us with a future narrowbody conversion landscape that is more crowded than Century Link Field during a Seattle Seahawks game.

One should not take the chart above too seriously. PEMCO, for example, has said 737NG programs are “in development”, but there is no guarantee that any will be launched. Same for Precision — Mr. Warner said the next program was under serious study, but that does not mean it will be launched. And if Precision does launch a new program it may turn out to be something other than an A321 (it could be even be a widebody). And while Boeing has granted its sales force authority to offer a 737-800 P-to-F conversion, formal launch will probably require more than the 15-unit order recently announced by YTO Express Airlines.

But even if not all of the programs shown in the chart above are launched, the field will still be impossibly crowded, particularly in the middle of the size range. Is there anyone in the air freight business who believes that eleven programs can successfully compete for A320, 737-800, and A321 freighter conversions?