Commercial Jet expands as narrowbody conversion market stays hot

Miami-based Commercial Jet, the primary conversion center for Aeronautical Engineers Inc’s passenger-to-freighter conversions, more than tripled its conversion and MRO capacity with a deal to open a 400,000 sq ft (37,000 sq m), multi-hangar facility at Dothan Regional Airport (DHN), 500 miles NE of Miami in the US state of Alabama.

As part of the deal, the Dothan Houston County Airport Authority will provide a $12 million renovation to the facility (which was formerly used as a conversion center by PEMCO). Work on the renovation has begun, and while the final building will not be completed until October of this year, Commercial Jet said it expects to open for business at Dothan in May.

This acquisition of the Dothan facility is an indication of the strength of the narrowbody freighter conversion market. Commercial Jet’s Miami facility has been at capacity for some time, and the same is now true for AEI’s other authorized conversion centers (Flightstar in Jacksonville, and Boeing Shanghai in China). Likewise, PEMCO, having reorganized under Chapter 11 bankruptcy protection last year (during which it abandoned the Dothan facility), now says it is busier than ever, both at its own facility in Tampa and at the TAECO and STAECO facilities in China. Even Bedek Aviation Group (the conversion arm of Israel Aerospace Industries), which had effectively exited the narrowbody conversion market over a year ago, is now rumored to have returned to the game with 737-400 P-to-F conversions for Turkish carrier Pegasus. And 757 specialists Precision Conversions and ST Aero are also busy.

This stands in stark contrast to the widebody conversion market, which has almost dried up. As far as Cargo Facts knows, a few remaining A300-600 conversions at EFW for DHL, and Boeing’s backlog of three 767-300  conversion orders from Guggenheim Aviation Partners are the only current activities in the widebody market. We know of no 747-400 conversion orders or conversions-in-progress, the MD-11 program has been effectively terminated, and while engineering work has begun on the Airbus A330 P-to-F program, no orders have been announced and certification is likely still two or three years away.

One obvious explanation for the strength of the narrowbody conversion market is that conversion is the only source of narrowbody freighters, whereas four types of new-build widebody freighters are available from Airbus (A330-200F) and Boeing (747-8F, 777F, and 767-300F). But to say that this is the only, or even the main reason for the current strength of the narrowbody conversion market and weakness of the widebody conversion market is an over-simplification of a complex issue. If you are interested in digging into the factors influencing the demand for freighters in today’s air freight market, join us at Cargo Facts Asia in Hong Kong next week, 16 – 17 April, where this will be one of the main subjects of discussion. For more information, or to register, click here.