LATAM accelerates expansion with up to eight 767-300BCFs LATAM Cargo has placed a firm order with Boeing for four 767-300BCF conversions and added options for up to four more, accelerating an expansion plan originally drawn up before the pandemic [FATs 005995-6002].
LATAM, already the largest major scheduled combination carrier operating 767 freighters, with eleven units, told Cargo Facts that it expects to take redelivery of the four converted freighters between December 2021 and July 2022.
The company had already had a fleet growth plan in place in 2019, said Andres Bianchi, CEO of LATAM Cargo. But LATAM has now sped up that plan by about 50%, mostly a demand-driven decision but also one enabled by the increased availability of passenger frames in the wake of the pandemic.
Bianchi said it is likely LATAM will exercise at least some of the four options, with tentative redeliveries between 2022 and 2023.
This is the second BCF order the carrier has made, after placing a three-unit conversion order in late 2017. The three aircraft, all 2006-vintage frames, were selected from the group’s passenger fleet, with the third completed in December 2019.
Like those three aircraft, Bianchi confirmed to Cargo Facts that LATAM will be sending its own passenger frames to be converted at the ST Engineering facility in Singapore (QPG), currently the only 767-300BCF conversion site after Evergreen Aviation Technologies (EGAT) in Taipei (TPE) stepped away from conversion work at the end of 2019.
In response to elevated demand for 767 conversions, Boeing announced a second line with ST Engineering in 2019. The following four aircraft are currently at QPG:
26329 (ex-LATAM) for SF Airlines, which arrived in October 2020;
30342 (ex-Pegas Fly) for SF Airlines, which arrived last November 2020; and
33085 and 33082 (both ex-American Airlines) for DHL Express, both of which arrived in February 2021.
Cargo Facts believes ST will begin work on at least one other ex-American Airlines frame for DHL in the next few months.
LATAM said it has not yet determined the candidate aircraft with certainty, and noted that it is not necessarily tied to selecting the oldest passenger 767s in the fleet, which are currently between thirteen and fifteen years old. LATAM’s three 767-300BCFs are all around fourteen to fifteen years old, while the eight production 767-300Fs range from around fourteen to twenty-three years in age. Another 767-300F (34627) is subleased to Mexico-based MasAir.
As of Sept 30, 2020, LATAM had twenty-eight 767-300ERs in its fleet. Many of the 767s previously operated by the group have gone on to become converted freighters, joining companies such as SF Airlines, Atlas Air and Cargo Aircraft Management (CAM).
With an even larger fleet of 767-300Fs, which Bianchi calls the “ideal” freighter type for Latin America, LATAM will not only be able to gain a deeper foothold in the major markets it already serves, but also transition some secondary routes into primary lanes The carrier also intends to ramp up frequencies on its European routes and look at expanding beyond Miami, currently the dominant cargo hub for Latin America,. Bianchi said.
LATAM Cargo is considering other new opportunities stemming from e-commerce growth, Bianchi added. This could include ACMI flying for third parties, both domestically or regionally.
LATAM is currently still operating up to around eight cargo-only flights with its passenger widebodies, and may reconfigure the 767s destined for conversion by removing seats from the cabin, said Bianchi. At one point last year, most of the airline’s 767-300ERs, 777-300ERs and 787s were allocated to cargo-only flying, but Bianchi said he expects passenger-freighter operations to start diluting during the next few months.
LATAM’s Brazilian affiliate also has a single 777F in the Boeing backlog that remains from before the 2012 merger of Chile-headquartered LAN and Brazil-based TAM.
The only other scheduled combination carriers with 767-300BCFs are: ANA, with five; Uzbekistan Airways, with two; and Royal Air Maroc, with one. The other operators are Atlas Air, SF Airlines, UPS, Cargojet, Air Transport International, Kalitta Air and DHL Aero Expreso.
EFW inducts first A320 for conversion Elbe Flugzeugwerke (EFW), the JV of Airbus and ST Engineering, has inducted the conformity aircraft for its A320-200P2F conversion program.
An aircraft has already been ferried to ST Aerospace’s Seletar (XSP) facility where touch labor for the conversion will be performed.
EFW confirmed to Cargo Facts that it plans to start converting the aircraft this month, but did not confirm the MSN of the conformity aircraft, or reveal the identity of the launch customer.
There are, however, just four A320-200s currently at Seletar.
969, ex-SilkAir, 1999 vintage, arrived at XSP in 2014
2737, IndiGo Airlines, 2006 vintage, arrived at XSP in February
5270, Jetstar Airways, 2012 vintage, arrived at XSP in February
6032, ex-Tigerair Australia, 2014 vintage, arrived at XSP in March 2020
While there is no precedent for new conversion programs, most feedstock units for newer single-aisle models have been between fifteen and twenty years old at the time of induction, according to a recent webinar from IBA. While not impossible, at under ten years old, units 5270 and 6032 are less likely to be conversion candidates than 969 or 2737.
Although EFW had previously expected to develop a supplemental type certificate (STC) for the conversion by 2021, EFW elected to prioritize its A321-200P2F ahead of the A320. An STC for the smaller A320 is now expected in the first quarter of 2022.
High demand for EFW’s active conversion programs, which include the A321-200 and both the -200 and -300 variants of the A330, have the conversion house moving to stand up conversion lines. While additional capacity may be added, EFW estimates it is currently sold out through 2024 at its facilities in Dresden (DRS), XSP and Guangzhou (CAN). Later this year, it will add a conversion line for the A321 at the VT Mobile Aerospace Engineering facility in Mobile, Ala.
EFW’s A320 design accommodates eleven main-deck container positions and can carry up to twenty-one tonnes of payload, with a range of 2,100 nm.
A second A320-200 passenger-to-freighter conversion program is being developed by U.S.-based C Cubed Aerospace with engineering partner Structural Integrity Engineering (SIE). C Cubed inducted the conformity A320 airframe (1523, ex-Sky Airline) for conversion at FMS in Kansas City (MCI) in September 2019.
Investor appetite in 737-800 freighters runs heavy Appraisers and carriers with exposure to the air cargo market expect investor appetite for the 737-800 to remain as a popular option for extending the life of the investment and aircraft.
Conversion orders, particularly from lessors that had not previously dabbled in the 737-800 conversion space, continue to increase the order backlog for STC holders Aeronautical Engineers Inc. (AEI), Boeing and Israel Aerospace Industries (IAI). With the air cargo market running in high gear, redeliveries are finding their way to operators both new and established, minimizing the near-term risk for a saturated narrowbody freighter market.
As the pandemic continues to hamper demand for passenger travel, aircraft owners “are stuck with aircraft, [and] they’re trying to find different options for them,” Dave Andrew, CEO of ASL Aviation Holdings, told Cargo Facts. “I’m sure there will be some more investments in freighters, and not just in the -800s, but other types as well,” he said.
While there is always some degree of risk for lessors converting aircraft without having an operator lined up, “if you just look at where the freight market is at the moment, I think it’s probably a small risk,” said Andrew. With the -800 in particular, “if you can get them at the right values, they would make a nice replacement for a -400. The ASL group, whose carriers operate one of the largest fleets of narrowbody conversions, recently firmed up ten options and is in the process of converting a total of twenty 737-800s to freighter configuration with Boeing.
On March 2, another lessor joined the list, with Ireland-headquartered Macquarie AirFinance announcing an agreement with AEI to convert four 737-800s into freighter configuration [FATs 006010-6013].
This is the first foray into freighter conversions for Macquarie, whose website shows a portfolio that currently includes sixty-five 737-800s.
The four aircraft will all be converted at the Commercial Jet facility in Miami (MIA), according to a press release from AEI, but both AEI and Macquarie declined to disclose additional details such as induction months or specific airframes.
John Willingham, CEO of Macquarie AirFinance, said in a press release that the order was prompted by “particularly strong demand in the express freight sector as the e-commerce industry continues to grow,” and that “it makes business sense” to extend the life of the lessor’s mature 737-800s.
Macquarie becomes the second new lessor to outline conversion plans for the 737-800 this year, after Vx Capital sent its first 737-800 to be converted with AEI in January.
As of March 2, at least fifteen of Macquarie’s 737-800s were in storage, according to ch-aviation. The 737-800s in Macquarie’s portfolio range in age from seven to just over twenty-two years old.
GA Telesis, which announced a 737-800SF conversion deal with AEI deal last July, exercised its option for a second aircraft two months later. The lessor recently confirmed to Cargo Facts that it is preparing the first freighter (32903, ex-Pegasus) for delivery to a confirmed customer, and that it has identified a shortlist of customers for the second (28826, ex-Blue Air).
GA Telesis also told Cargo Facts that the market is holding steady and that it is looking to add more 737-800 freighters to its portfolio by converting more with AEI.
In terms of operators adding the platform, carriers in Africa, Asia, the Americas, Europe and elsewhere are evaluating the addition of the type in the near future, carriers and lessors have told Cargo Facts. Most recently, South Korea-based Air Incheon is set to begin operating its first 737-800SF later this year, on lease from BlackRock.
Other lessors that have ordered 737-800 conversions in the past twelve months include Aero Capital Solutions, Aircraft Finance Germany, BoComm Leasing and GECAS.
Avensis Aviation aims for share of A330 conversion pie U.K.-based Avensis Aviation has launched a multitiered portfolio of A330 cargo modifications that could include, in the longer term, a full-freighter conversion for the A330.
Avensis, formally registered in October 2020, is headed by Chief Executive Officer Cristian Sutter, who joined the startup Feb. 1, with a background in passenger aircraft cabins and interior modifications. The company started off with a basic team of five people last year, with the idea taking shape around September. Soon after, a small group joined after being made redundant from another aviation company. The team now consists of around fifteen people and is anticipated to grow to around sixty or seventy.
“Avensis in its current form would not have existed, if not for the pandemic,” Sutter said, referring to both the availability of people with aerospace engineering and certification experience and the three products the company offers. Two products stem from the lack of cargo capacity caused by reduced passenger flying due to COVID-19.
The first and least invasive level of passenger aircraft modification Avensis offers is “Levis,” which is similar to the option several other companies have offered: a light reconfiguration achieved by removing seats to allow for cargo to be strapped with nets secured to the seat track. This modification only addresses an immediate, short-term need, and the European Union Aviation Safety Agency (EASA) has only approved such modifications until the end of 2021. Avensis will soon secure its third airline customer for Levis.
Since March 2020, Cargo Facts has recorded more than 200 passenger aircraft being reconfigured through seat removal, with the most popular type being the 777-300ER.
The Avensis intermediate tier, called “Medius,” will not be time-limited like Levis. It is “as far as you can modify a passenger airliner and as close to a full freighter as you can take it without permanently altering the fuselage structure,” Sutter said. Medius involves turning the cabin into a Class E or Class F cargo compartment by removing all cabin monuments, such as lavatories and overhead compartments, and installing a supernumerary compartment, a smoke curtain and modifications to the environmental control and smoke-detection systems. The process, which is completely reversible, requires a total downtime of around six weeks.
Avensis signed TAP Air Portugal as a launch customer for Medius on the A330-200 around the end of last year, and expects to obtain an STC from EASA in the next couple of months. TAP already reconfigured two A330-900s around mid-2020 and two A330-200s in late 2020, but those were Levis modifications.
AELF FlightService, which recently acquired Maleth-Aero and launched its ACMI business with reconfigured A330-200s last year, told Cargo Facts that it has been taking “an in-depth look” at a medium freight concept and is in talks with several engineering firms about such an option. “We view this as a longer-term, more permanent solution for e-commerce, with less dense cargo on the upper deck,” the company said. “We hope to be able to offer this type of solution on a charter and ACMI basis as we transition from auxiliary freight configuration in the coming year.”
ATSG set to lease 24 more 767Fs through 2022 Air Transport Services Group (ATSG) affiliate Cargo Aircraft Management (CAM) expects to originate leases for at least twenty-four 767Fs in 2021 and 2022. Fifteen 767F placements are expected this year and CAM is negotiating the placement of nine more freighters in 2022, the company said in a Q4 earnings release.
Amazon will take the bulk of this year’s placements, with five in the first quarter, two in the second and four in the second half. CAM plans to lease at least four 767 freighters to other customers in 2021.
The company is also in negotiations with external customers for nine 767-300F leases in 2022; these may or may not also come with a CMI arrangement. Further into the future, CAM is seeing interest from customers — some in new markets — for multiple leases of 767Fs that could potentially begin as far out as 2025, according to a discussion with analysts following the release of ATSG’s Q4 earnings.
Northern Air Cargo took delivery of a 767-300BDSF (29431, ex-American Airlines) on lease from CAM [FAT 006017].
AerSale acquired two 757-200s (32381 and 32396) from American Airlines [FATs 006003-6004].
India-based Blue Dart acquired two 757-200PCFs (25898 and 27598), previously on lease from DHL Express [FATs 006007-6008].
Malaysia-based Kargo Xpress took delivery of its first 737-400F (26605, ex-Connect Cargo), on lease from Vallair [FAT 006014].
Mexico-based Aeronaves TSM acquired a 737-400F (28151, ex-Qantas) [FAT 006015]. The aircraft had previously been expected to join Emirates International Air Cargo.
Indonesia-based Tri-M.G. Intra Asia Airlines took delivery of a 737-300F (28569, ex-Latin American Wings), on lease from Plane Business Leasing [FAT 006006].
