FREIGHTER CONVERSIONS REPORT


“That being said, the spec of an AEI converted freighter is quite close to that of the passenger version. The conversion keeps most of the aircraft structure and we only add structure where required. The only part that is removed is where the Main Deck Cargo Door (MDCD) goes, the rest is reinforced.” The economic justification for conversion is straightforward,


notes Convey. “Narrowbody freighters typically operate two to four hours a day, five days a week and therefore the acquisition cost is critical. This is why there are no OEM versions and why the conver- sion of older aircraft is so popular.” Conversion does not have any effect on the useful life which is


aircraft are out of fashion.” Citing an industry trend that suggests by 2020, 70 per cent of


air freight will be carried in the lower hold of passenger aircraft, Eolia Group has come up with a conversion process that could be a means of surviving as a company during these structural changes, while providing a viable PTF model. The company has created the Low Cost Freighter (LCF) programme. LCF Conversions is a pro- gramme to convert Boeing and Airbus third generation medium widebodied (MWB) passenger aircraft to freighters. LCF works not to create a maindeck freighter per se, but rather a


“freighter of two belly decks”, a stripped-down air frame that pro- vides belly-hold capacity in what was the passenger cabin. Duke is candid enough to acknowledge that while the LCF concept has met with almost universal acceptance within the industry, he has been unable to turn this into firm orders. But he points out that his established competitors of conventional PTF solutions have also been unable to secure new orders. With the move towards belly hold making freighters redundant for all air cargo, save out- of-gauge and heavy lift consignments, the LCF programme has the advantage of being a good prospect for nervous investors, he thinks. Duke says: “Those that like the idea can see it as their plan B, it is


a low capital investment that can in most cases be secured against the part out value and the low lease rentals that the industry can now afford; as a back stop, the converted aircraft can be turned back into passenger configuration.”


Alternative uses


There are also a number of alternative use LCF configuration options, as well as the freighter-only configuration, including Combi and seasonal change configurations; together with poten- tial use on special mission aircraft such as the Airbus A330 Multi Role Tanker Transport, which all adds to the potential market flex- ibility of the LCF concept. The LCF programme’s first step has been the installation of


an interior lift that allows Unit Load Devices (ULD) to be loaded through the lower deck door and then stored on the former floor of the cabin. The drift towards belly hold is put into sharp relief by Duke: “The move to belly-hold is doing for aviation what Amazon is doing to bookshops.” One factor of the LCF programme is that it is creating like-for-


like payloads where there are conventional PTF programmes on the drawing board. In some cases the LCF configuration can offer more payload than the conventional PTF installation, as the LCF takes overall weight out of the converted aircraft, whereas the con- ventional PTF conversion will add weight. In the case of the LCF from an Airbus 330, compared with the


PTF freighter, there could be up to three extra tonnes of weight which translates into additional payload,” he says. The mid payload 50 to 85 tonnes segment, is where the LCF con-


siders it is, and there is little reason it should not be able to create a profitable niche here, if it, “can develop solutions which are practi- cal, competitive and, most important, the cost is in line with typical interior retrofit costs that will be incurred with passenger aircraft lease transactions,” says Duke. For Robert Convey, vice president of sales and marketing for Miami (US)-based Aeronautical Engineers (AEI), there are two sources of passenger aircraft to be converted. He says: “We have customers taking aircraft out of the desert and we have customers taking aircraft out of active service and right into conversion.” Convey is sceptical as to the welcome the market might give a passenger-freighter-passenger conversion: “This is something people ask about, mainly money guys that want options but it has never been done and, due to cost, is not realistic,” he says. AEI is in the business of converting aircraft, not acquiring them.


He says: “With the exception of the prototype aircraft we buy for a new program, AEI does not get involved in the ownership of the asset. We provide conversion services to operators and owners.” The OEMs do not make a narrowbody freighter, with the excep- tion of the Boeing 737-700C which costs $45 million. Convey says:


ACW 14 APRIL 2014 9


set by the OEM and the FAA, says Convey. “There are additional periodic inspections that will need to be carried out but they are usually in sync with those of the OEM,” notes Convey. The con- verted freighter value will normally be increased by the cost of the conversion and any MRO put into the aircraft: $2 million passen- ger, $2 million conversion, $500,000 maintenance, equals a $4.5 million freighter. Brazilian carrier Sideral Air Cargo has ordered two more AEI Boeing 737-400SF PTF conversions. Both aircraft will be modified at Commercial Jet Services facility located in Dothan (US) start- ing in June 2014. This order brings Sideral Air Cargo’s freighter fleet to five, with


one AEI Boeing 737-300SF and four AEI Boeing 737-400SFs. Con- vey says: “AEI has worked tirelessly to bring the B737-400SF to


market and thanks to our loyal customers like Sideral Air Cargo we now provide 75 per cent of all 737-400 conversions worldwide.” Conversions have been delivered to a number of cargo airlines since the start of the year. PEMCO redelivered a Boeing 737-400 Combi aircraft to First Air, the first of two conversion projects for the Ottawa (Canada)-based carrier. This Combi will be used pri- marily within Northern Canada. The aircraft carries four and a half pallets of freight and 72 passengers. “First Air selected PEMCO to provide custom-built Combi aircraft because of its reliability, inno- vation, highly-trained personnel and the company’s attention to detail,” says Brock Friesen, chief executive officer of First Air. Another PEMCO redelivery was of its first Boeing 737-400F


Air Incheon aircraft. Redelivered in late 2013, the conversion was completed at PEMCO’s partner and major MRO provider STAECO, based in China. The conversion is PEMCO’s first Boeing 737-400F for the Korea- based carrier Air Incheon, which selected the PEMCO Boeing 737-400 high yield freighter for its best-in-class payload and pal- letised volume, and because its optimised centre of gravity allows Air Incheon to use the entire payload without requiring profit-rob- bing, fuel-burning trim. In a general sense, acquiring a converted freighter can be seen as an economical entry into freighter operations. In a wider sense, some are wondering whether the bulk of air freight in the future is set to be stowed in the belly? What price then a conversion?


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