BBAM Aircraft Leasing & Management plans to add up to a dozen Boeing 737-800 converted freighters to its portfolio in response to high demand for regional cargo jets that can support the burgeoning e-commerce and express cargo market.
The San Francisco-based leasing outfit said this week it ordered six conversions, with an option for six more, from Boeing Co. (NYSE: BA), bringing its total orders and commitments for the 737-800 passenger-to-freighter conversion to 15.
BBAM manages 530 Airbus and Boeing jets for investors and leases them to airline customers.
“As we look ahead to expanding our cargo fleet, the 737-800 Boeing Converted Freighter provides the performance and efficiency our customers need,” BBAM CEO Steve Zissis said in a statement.
The lessor is diversifying its cargo fleet by getting in on the ground floor of the Airbus A321 conversion market. It is one of the first companies to take delivery of a converted A321 and has two more on order. Earlier this month it delivered to Titan Airways an A321 converted on its behalf by Elbe Flugzeugwerke (EFW), a joint venture between Airbus and ST Engineering in Singapore.
Several engineering and aviation maintenance companies are designing kits to modify the A321, which will compete head-to-head with the 737-800 in the small freighter category. The A321 has some key advantages, most notably more cubic volume and the ability to carry small containers in the lower deck because of its original design.
Both planes are much more fuel efficient than earlier models.
They are well suited for express networks, which are heavily designed with short-haul routes to quickly move goods on frequent shuttle runs to meet customer commitments for expedited delivery.
The B737-800 can carry up to 52,800 pounds and fly up to 2,025 nautical miles.
The A321 and 737-800 “have different technical and operating characteristics, which provide some versatility when targeting different market segments,” BBAM spokesman Matt Dallas said about why the company is stocking up on both aircraft.
Boeing began offering a conversion program in 2018 and has secured more than 150 orders and commitments so far.
In August, GE Capital Aviation Services agreed to purchase up to 20 converted 737-800 aircraft through Boeing, bringing its total orderbook to 60 firm orders and 14 options.
Boeing spokesman Nate Hullings said the actual retrofits will take place at licensed facilities such as Boeing Shanghai Aviation Services, Taikoo (Shandong) Aircraft Engineering Co. Ltd. and Guangzhou Aircraft Maintenance Engineering Co. Ltd. in China.
Israel Aircraft Industries also converts 737-800s.