News / AEI to convert B737-900ERs to freighters, despite glum narrowbody outlook

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Aircraft conversion firm Aeronautical Engineering (AEI) is adding another aircraft type to the global freighter fleet.

Yesterday Bob Convey, SVP of sales and marketing, announced a programme to convert B737-900ERs into an all-cargo configuration.

“This is a strategic move to address the increasing demand for higher-capacity narrowbody freighters,” he said.

“With the global ecommerce and express markets continuing to grow, the B737-900ERSF will provide operators with the right blend of payload, volume, and economics.”

With a payload of 26 tonnes on the maindeck, total cargo volume of 7,272 cu ft and 12 pallet positions, the aircraft will be the largest freighter in AEI’s portfolio, offering one pallet position more than the 737-800F.

The B737-900, which is three metres longer than the -800 was developed to add passenger capacity, but its limited range affected its appeal, resulting in only 52 aircraft being produced. The 737-900ER fared better, with 505 delivered – but it was subsequently replaced by Boeing’s 737MAX.

Alaska Airlines, the launch customer for the 737-900, started retiring them in the spring and placed the last of its 12 into storage last month.

The 737-900ERSF has one pallet position fewer than the A321 freighter, the largest narrowbody in the Airbus line-up, but is well short of the Airbus in terms of volume capacity, noted Tom Crabtree, MD of Transport Research Advisory.

However, said Mr Convey, on the whole, freighter aircraft tend to max-out on volume before they reach their maximum payload, adding: “We’ve got quite a bit of interest.”

He sees AEI’s latest freighter as a “737-800-plus” and believes operators with Airbus planes in their fleet will likely lean towards the A321, while carriers with 737-800s in their line-up will likely go for the 737-900 for the additional pallet position and longer range.

He regards integrated express carriers as a market segment that will likely acquire larger numbers of the model. And Mr Crabtree shared this assessment, adding that freighter operators that fly on contract for ecommerce firms or integrators should also be very interested.

Mr Convey expects to obtain certification for the 737-900 from the US authorities by 2029, with commercial production commencing that year or 2030.

Given the high commonality between the 737-800 and the -900 variant, AEI will be able to produce both models on the same conversion lines, he said. Theoretically, this should also facilitate certification of the new freighter, but the Federal Aviation Authority had recently taken more time to complete the process for aircraft, he added.

“I think this development time is needed,” he said, adding that AEI usually gets started on a new programme a few years ahead of its expected market entry.

The time lag should also help with the final price of the freighter, at this point the residual value of feedstock was still rather high, Mr Convey said.

Moreover, demand for narrowbody freighters is in the doldrums since the end of US de minimis exemption for ecommerce imports hit demand for rushing parcels to markets.

Currently a number of 737-800Fs are parked, which has affected conversion activity – record numbers of converted freighters entered the market in the past three years – and Mr Convey expects demand for narrowbody freighter conversions to remain in low gear for much of next year.

A recent report from IBA noted that the past five full years – 2019 to 2024 – saw a record number of passenger-to-freighter conversions, driven by constrained belly capacity, ecommerce and high freight rates. Freight fleet growth was 33% in the period, with more than 100 aircraft a year converted, peaking in 2023 with 198 – mainly driven by narrowbodies, and leading to oversupply for regional capacity.

AEI’s 737-900 programme is covered under a licensing agreement with Boeing. Mr Crabtree doubts that the plane-maker would set up its own conversion scheme for the type. Unless other conversion specialists enter the fray, that could leave the whole 505-unit-strong 737-900ER fleet available for AEI.

But Mr Crabtree is sceptical. “I’d be surprised if they did more than half of that number,” he said.