News / Conversions still first choice for many carriers eyeing freighter capacity

Credit EgyptAir

Although the current aircraft conversion boom will not last, say analysts, freighter markets will continue to see a 70:30 split in favour of conversions over new units.

Aviation intelligence specialist Cirium forecasts supply of some 3,560 freighters over the next 20 years, including 1,060 newbuilds (30%) worth $130bn, and 2,480 conversions of passenger aircraft (70%).

One customer, EgyptAir Cargo, is expecting a freshly converted B737-800SF on 1 March with a primary deck payload of 23 tonnes – capacity of 137 sq metres in the upper compartment (11 pallets) and 44 sq metres for the lower compartment.

Yehia Zakaria, chairman and CEO told The Loadstar his cargo operation was intricately linked to the needs of Egyptian exporters. He said: “We are operating three A330 freighters in addition to the new 737-800SF, and have 20 other widebody aircraft with belly space.”

Yehia Zakaria

Mr Zakaria says the converted B737 will operate medium-short haul routes around Africa the Gulf, Middle East and Europe, as well as feeder operations through its Cairo hub.

He added: “We are planning to add another two A330Fs by 2025 and a study is under way to convert another B737 after receiving the A330Fs.”

He said EgyptAir Maintenance & Engineering, its MRO division, was considering conversion work of its own and the carrier has commissioned a feasibility study to perform conversions in house based on market demand, predominately for EgyptAir and other customers.

Meanwhile, post-Covid, the general market is returning to a more traditional share between belly and main deck cargo, according to Cirium, which says there will always be demand for freighters as passengers do not always fly the same routes as cargo requires, especially on Asia-Europe trades.

In terms of conversions, most are geared towards the e-commerce market, where volume is key, whereas belly capacity plays a key role in certain markets, like the transatlantic. The newer generation of passenger widebodies certainly have more capacity, but their prime purpose remains carrying people and baggage.

The development of new more efficient freighters like the A350F and 777-8F shows the industry is investing in the next generation. Airbus and Boeing are going head to head on large-capacity newbuild freighters, due to enter service in 2025 and 2027 respectively. This capacity will play out alongside new larger belly capacities on aircraft like the A350, but so far, there is little evidence that the passenger variants will pose a threat to traditional and converted freighters.

The air freight market has seen a softening of demand, driven by slowing global trade, higher inflation and cooling economies. So, IATA believes this year will see a decline in cargo volumes – although there is a more positive outlook for cargo yields, with rates staying above pre-pandemic levels, according to Cirium.

The drive for greater efficiency will see more capacity used for fleet replacement rather than growth, with older freighters being phased out. Conversions are still expected to exceed the 150 completed last year, based on the backlog of conversion orders and extra conversion lines being added.

Newer-generation conversion programmes, like those for the A321ceo, B737-800, A330ceo and B777-300ER, are expected to show further gains.