From the Cockpit with K2 Aviation’s Karl Ryan

K2 Aviation is one of the most recent lessors to enter the freighter space after announcing in June the acquisition of two 737-800BCFs. One unit (35022) is in service with ASL Airlines France and the other (38494) with ASL Airlines Belgium. [caption id="attachment_57298023" align="alignright" width="360"] Karl Ryan, managing partner at K2 Aviation. (Courtesy/K2 Aviation)[/caption] Cargo Facts caught up with K2 Aviation Managing Partner Karl Ryan to discuss the lessor’s recent freighter deal, what the freighter segment looks like now, and K2’s broader strategy. What follows is an edited version of the conversation. Cargo Facts : How did the deal involving the two 737-800BCFs come about? Karl Ryan: I would say it was opportunistic. It was part of an RFP that was shown to us by Aircastle, and I expressed an early interest in that RFP, specifically for these assets. That’s how it came to be. We knew one way or another we were going to work with ASL, but this one came through a third-party origination. CF : With these two narrowbody freighters in your portfolio, are you also thinking about converting your own? KR: We have no conversion plans as of yet. I think there’s still some out there on the market that need to be finally placed. And so, we looked at these as good investments as they were on contract with ASL and, having the ASL part of our family, we thought this was a good way to dip our toe into the market. We would be open to other freighter opportunities if they came along, be it sale-leaseback or part of a portfolio acquisition. We would definitely look at others now that we have our equity sponsor comfortable with the freighter segment and with our chairman watching the freighter segment pretty carefully. We just don’t have anything yet. Our main focus is still on buying mid-life narrowbody aircraft on lease, so that’s what we’re still going to do. CF : How big is the K2 Aviation portfolio? KR: We are at twelve assets. We actually had thirteen but sold an A320 recently that had been flying with Braathens. We do have two widebodies, both A330-200s, one of them coming originally with the DAE portfolio that we started with. We are pursuing other opportunities right now that just haven’t been announced, but we will definitely be growing the portfolio this year. Hopefully, we’ll be in the high teens or near twenty by the end of 2026. If we hit that, that would be a good win. We’re already halfway through the year here, so we’ve got a lot of work to do to get that done. CF : Do you have a rough idea as to what proportion freighters will occupy in your portfolio? KR: We don’t have a firm view yet. We’re still very small, so they do occupy a large percentage today. I don’t think it would be as much in the future. We’re just getting to that — we just passed our first ten assets, and now we’re at twelve and going into the teens. So, it is a nice concentration. And if we see something else opportunistically, we’ll look at it. CF : How much longer do you think we will see 737NGs, A320ceos and A321ceos operating? KR: We’re in this time where there are delayed aircraft, engine issues with the GTFs and LEAPs, supply chain, you name it; we think all these factors have brought those current-generation NGs and A320ceos to the right and they’ll keep operating even beyond 2030. They’ll keep operating to some extent and there’s still definitely a need for them in the market. CF : What does that mean for the freighter market? KR: I think that before the Iran war, we were seeing really frothy values in the midlife space. And I think hopefully, it’s starting to turn up a little bit. Time will tell on that and come back to a little bit of reality. We’ve kind of come up into a bubble. That has made it really difficult to put together a freighter opportunity because of finding the right feedstock airframe, but it’s the engines that really push the whole price of an -800. If you’re going to try to find two engines and an airframe, that makes it difficult. So, I think in time, that will come back into equilibrium as well. More of the 737 Classic freighters will retire and sweep up the remaining -800 feedstock that’s out there. I see the Classics phasing out through the end of the decade. Sure, maybe some of the youngest versions will trickle on past 2030. But I think you’ll see a lot more of the -800s that are on the ground today fully in service, probably also by the end of the decade. So, I think that we need that convergence of the last bulk of retirees of the Classics and those -800s getting back into service. And then I think the -800 market could go back to a normal, healthy equilibrium in the next three-and-a-half years. Cargo Facts Symposium 2026, the premier event for the freighter aircraft and air cargo industries, will take place in Nashville, Tenn., on Oct. 21-23. Find out more and register by Sept. 4 to take advantage of early-bird pricing.

From the Cockpit with K2 Aviation’s Karl Ryan

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