Widebody conversions: Orders and redeliveries outlook

With the emerging shift toward widebody conversions, the market necessitates a thorough understanding and state of order backlogs, conversion house capacity and aircraft redeliveries. Recent 767P2F redeliveries, remaining orders Israel Aerospace Industries (IAI) and Boeing are the sole providers of 767 freighter conversions, with IAI’s annual conversion capacity estimated by CFC at twenty-four aircraft. Despite this capacity, IAI saw decreased output of approximately eighteen redeliveries in 2023, primarily attributed to a decrease in demand as the program ages. Meanwhile, Boeing's conversion capacity stands at about eighteen aircraft a year, which is on target with its 2023 redeliveries.

CFC knows that Cargo Aircraft Management (CAM) has inducted three with IAI, three for Challenge Group and one for Ethiopian Airlines that are expected to be redelivered in the first quarter of this year. Boeing has inducted two 767s for Saltchuk Aviation , Japan Airlines and UPS , which CFC estimates will be redelivered in the second quarter. LATAM also recently sent its final two out for conversion with Boeing, which should be redelivered by yearend.

In Figure 1, the remaining orders for 767 conversions stand at about twenty-seven, with CAM and Saltchuk having the most orders left to be completed. Figure 1 - Current 767 conversion orders

Considering fewer than thirty conversions in the backlog, 767 conversion capacity and rates across IAI and Boeing will decrease in the next two to three years. As a result, CFC expects fifteen to seventeen aircraft to be converted in 2024. Operators like Mas have demonstrated a preference for the A330, ceasing 767 operations in favor of the newer aircraft type. CAM also decided to slow 767-300ER conversions, indicating a careful approach to capital expenditure and fleet composition when economic and regulatory pressures demand strategic agility. 777P2F orders, conversion program status The cargo conversion market for the 777 is showing significant activity, with three primary conversion houses — IAI, Mammoth Freighters and KMC — planning to fulfill a backlog of orders. IAI has a significant order book with fifty-eight orders and an additional twenty-three options, as shown in Figure 2. This includes commitments from strong players in the industry — Hongyuan Group , Emirates , AerCap and others — fortifying the industry’s confidence in conversion capabilities.

IAI has a conversion capacity of about eighteen aircraft per year (Figure 3). It expects to obtain its STC in the first few months of 2024 and, once obtained, IAI would be in a position to redeliver an estimated four to eight 777-300ERSFs by yearend. When all twelve planned lines are finished, production capability should rise to about twenty-six aircraft annually. Figure 2 - Firm orders and options announced by 777P2F programs

Mammoth Freighters, though newer to the scene, is making its mark with thirty-one orders, predominantly from Jetran/DHL and an undisclosed client.

With a current annual capacity to convert approximately seven and a planned fifteen aircraft, Mammoth is targeting mid-2024 for its STC. Mammoth has at least three 777-200LRMFs and one 300ERMF in conversion currently and is in the position to redeliver three to five aircraft by yearend pending STC approval. The 300ERMFs are in the prototype stage and AviaAM is slated to take the first one when completed.

In a recent development on January 15 th , Mammoth launch customer Cargojet announced an agreement to sell its four 777-200LRMFs to Jetran . This is in line with its decision, announced in May of 2023, to withdraw its commitment to add four 777-300ERSFs from IAI. Cargojet will instead focus on operating 757Fs for DHL as well as 767Fs, which Boeing is seeking a potential exemption from International Civil Aviation Organization (ICAO) environmental emissions regulations that will effectively ban the production of Boeing's current model 777F and 767-300F by 2028. Figure 3 – Current 777 conversion program capacity

Note: Conversion capacity based on current conversion lines under development, excluding planned.

KMC is smaller in scale with an initial expected capacity of two conversions per year with three orders and seven options from Backbone Freighter on the books. KMC is unique in opting for the forward cargo door and lower but less complex payload changes than the other two houses. KMC is working closely with the FAA and is confident in its certification process, which it hopes to complete by yearend.

Briefly comparing the burgeoning 777 conversion market to new production, the A350 and 777-8 freighter orders are considerable, given the operational time frames of 2026 and 2027, respectively. The A350F has secured fifty orders with an additional twenty-five options, led by major carriers such as the Air France-KLM Group and Cathay Pacific ; meanwhile, the 777-8F has fifty-five firm orders and five letters of intent, dominated by a massive order from Qatar Airways Figure 4 - Firm orders and options announced

Penetration of A330 and Airbus into the widebody P2F segment The A330 conversion market is in a new and healthy stage with ninety-six orders on the backlog, reinforcing the growing demand for medium-widebody freighters in the global cargo sector. Elbe Flugzeugwerke (EFW) and IAI are the two principal conversion houses for the A330. EFW’s estimated annual capacity is approximately sixteen aircraft while IAI is still conducting pre-conversion tests on their prototype.

EFW's order book reveals a diversification of clients and has a clear edge as shown in Figure 4. It has redelivered six A330s in the past four months, one of which Hawaiian Airlines now operates for Amazon and is the first of ten A330-300P2F orders. Another is CDB Aviation’s unit 791 which left Shanghai on Jan. 18.

Notably, EFW recently redelivered units 842 and 853 to Qantas , the first operator ever to go with CF6 engine-equipped A330P2Fs .

Regarding the aircraft for which CFC has details, EFW has inducted three units for Altavair for Amazon, one for Airbus , one for DHL , and one for CDB Aviation, all of which are estimated to be redelivered early to middle of this year. DHL is the closest to completion based on the time inducted.

Figure 4 shows IAI’s A330-300BDSF launch customer Avolon with thirty orders while EFW dominates the remaining ones as the only active program with its 200 and 300P2F models. Figure 4 - Current A330 Conversion Orders

Conversion market strong going into 2024 2024 is poised to be a significant year for aircraft conversion redeliveries, albeit with a slight decrease from the record numbers of 2023, which saw a record seventy-seven widebody aircraft redeliveries.

CFC ’s projections for 2024 indicate a modest reduction to about fifty-nine redeliveries, an average annual widebody conversion capacity extending through 2027. There are twenty-seven remaining 767 conversions, seven to ten possible 777 redeliveries contingent on STCs, and an estimated twelve to sixteen Airbus A330 conversions executed by EFW.

Looking ahead, the trend in widebody conversions is anticipated to persist, stringent upon the increasing availability of suitable aircraft feedstock.

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