IAI targets June for 777-300ER freighter induction

Israel Aerospace Industries (IAI) completed the critical design review for its 777-300ERSF passenger-to-freighter conversion program and plans to induct the conformity aircraft (32789, ex-Emirates) at IAI’s Tel Aviv (TLV) facility in June. [caption id="attachment_415724" align="alignright" width="546"] The GECAS-owned conformity aircraft for IAIs 777-300ERSF freighter conversion program. Photo/GECAS[/caption] Touch labor for the conversion is expected to begin at a time when freighters continue to play a dominant role in delivering cargo as pandemic-related travel restrictions inhibit the return of widebody passenger flights and belly capacity on many key routes and trade lanes . As another consequence of lower international travel demand and an uptick in idled widebody aircraft, declining feedstock values for the 777-300ER are expected to make the cost of acquiring a freighter-converted 777 more palatable, in the $50 million to $60 million range. Half-life values of early-build 777-300ERs are currently between $33 million and $40 million, Mark Halsor, president of aircraft appraisal firm AISI, told Cargo Facts . “Candidates for cargo conversion would normally be in materially less than half-life condition, so it is fair to say that suitable feedstock prices could be in the $20 million to $30 million range,” he said. Conversion costs and some airframe maintenance run an additional $30 million, Halsor estimated. While some pressure has been relieved from airframe feedstock values, the high cost of GE90 engines and maintenance make it necessary to find aircraft with a few years of remaining cycles. “GE90-115 engines are very expensive to overhaul and individual engine life-limited parts (LLP) can approach $1 million for a new LLP,” said Halsor. If engines require an overhaul, “the cost of suitable feedstock would be just too high.” GECAS, the launch customer for the 777-300ERSF with fifteen conversion orders and fifteen options , told Cargo Facts when the program launched in 2019 that a partnership with its affiliate GE Aviation aimed to provide a pipeline of suitable engines and cost-effective MRO solutions. Last month, GECAS’ parent GE agreed to merge with AerCap in a $34 billion asset transfer. It’s unclear at these early stages just how freighters will factor into the portfolio strategy for the newly combined goliath. Following the aircraft’s induction, IAI will begin executing its design for the conversion, according to a GECAS press release. The modification itself will include procedures familiar to most jet freighter conversions, including structural reinforcements to the fuselage and floor to increase the maximum structural payload and the installation of a powered cargo loading system, a main cargo door, window plugs, and a 9G rigid cargo barrier. GECAS is targeting placement of the first 777-300ERSF with launch operator Kalitta Air in 2023 , assuming certification goes smoothly. “We're at the point where we will finally see the thing that Boeing was predicting all along, which was that there was going to be enough of a decline in feedstock values to make the -300ER conversion feasible,” said Halsor. “Unfortunately, it took the pandemic.” Cargo Facts Asia, taking place April 20-21 as a virtual experience, is the event for exploring opportunity in the Asia-Pacific region. The event continues to bring together the best, brightest, and most innovative executives in the global air cargo industry. Learn more and register at www.cargofactsasia.com .

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