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  • OTVI.USA
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Air CargoAmerican ShipperModern ShipperNewsTop Stories

ATSG ramps up to lease A321 converted freighters

Cargo company places initial order for 2 used passenger planes

The leasing arm of Air Transport Services Group, an aviation services and air cargo transport provider, said Tuesday it has committed to purchase two Airbus A321 passenger planes and convert them into freighters to meet growing demand from express delivery companies. 

Tampa, Florida-based PEMCO, another ATSG subsidiary that specializes in passenger-to-freighter conversions, will do the retrofits. Overhaul of the first plane will begin in the fourth quarter and Cargo Aircraft Management will lease the aircraft to an unidentified customer in the second quarter of 2022. The second A321-200 will go in the engineering shop about the same time, with redelivery projected during the fourth quarter, according to the parent company.

The A321 is a new entrant into the converted freighter market. The first plane was converted last year by an Airbus affiliate for Qantas Freight and only a handful are in operation so far. The narrowbody aircraft is going head-to-head against the Boeing 737-800 in the regional cargo and express delivery market and is also seen as a strong candidate to replace older Boeing 757 freighters as they get retired in the coming years.

“We have accelerated our plans to invest in and offer this midsize, midrange freighter type because our express-network customers have expressed strong interest in adding it to their fleets,” said Mike Berger, ATSG’s chief commercial officer, in a statement. “It is very well suited for air-express service and e-commerce fulfillment over shorter routes and with smaller payloads as a complement to our existing fleet of more than 85 larger Boeing 767 converted freighters, and with better performance than Boeing 757 freighters or any Boeing 737 freighter variants. The time is right to launch this milestone initiative for ATSG and its aircraft leasing customers.”

CFO Quint Turner declined to identify specific customers for the aircraft, but said multiple parties have expressed interest in both aircraft.

PEMCO’s conversion work is based on a design by 321 Precision Conversions, a U.S. joint venture between Portland, Oregon-based Precision Aircraft Solutions and ATSG. In late April, the Federal Aviation Administration approved the company’s program for modifying the A321. 321 Precision Conversions has licensed PEMCO to install its conversion kits. 

ATSG (NASDAQ: ATSG) will make money through 321 Precision Conversions selling the conversion kits and royalties for the supplemental type certificate required for each aircraft, as well as PEMCO’s engineering work. 

Converting used passenger planes to freighters is a complex engineering task that involves stripping out the cabin interior, covering windows, cutting the frame and adding a large cargo door, reinforcing the floor for heavy containers and installing a hard barrier in front of the cockpit and a cargo-handling system.

321 PC earlier this year delivered its first converted freighter to Vallair, an aviation services company in Luxembourg. The plane is now in operation for SmartLynx Malta, a new cargo airline owned by a Latvian passenger carrier that began flying parcels for DHL Express in Europe. The manufacturing work for that aircraft was done by Avocet, also based in Florida. SmartLynx has committed to four more leases for A321s from GTLK Europe, which is sending the planes to the Airbus affiliate Elbe Flugzeugwerke for production.

321 PC’s second conversion is underway at PEMCO and the third aircraft will be inducted into Avocet’s facility in the second half of July, said Sales Director Zachary Young. Customers, or end users, have not been publicly identified yet.

Allocating conversion work to different maintenance, repair and overhaul partners is based on timing, scheduled delivery, geographical location and other customer preferences, Young said.

Vallair, which arranged the delivery to Qantas, recently said its third A321 freighter is scheduled for delivery in the third quarter. 

Aviation experts say the A321 converted freighter has excellent characteristics for the short- and medium-haul market. Express carriers are rapidly adding to their fleets as volume from e-commerce shipments soars. Narrowbody planes are ideal for shuttle routes because the planes can be easily filled without wasting space and require less fuel than larger aircraft.

The A321 is about 25% more fuel efficient than older freighters in its size class, with better range, payload and volume capacity. Its ability to carry containers in the lower hold gives it an advantage over the 737-800, which is limited to loose cargo. Analysts say the main reason sales might lag is if carriers that operate Boeing fleets want to stick with the same aircraft.

The 321 Precision Conversions and Airbus versions differ slightly in weight and other characteristics.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

RELATED NEWS:

Trans-Atlantic rivalry brews over Airbus A321 freighter

Why the A321 converted freighter looks like a hot ticket

Amazon, FedEx air partner ASL orders 737-800 converted freighters

Boeing, IAI expand production lines for 737, 777 freighter conversions

Eric Kulisch, Air Cargo Editor

Eric is the Air Cargo Market Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at ekulisch@freightwaves.com

One Comment

  1. Attn Eric Kulisch, Air Cargo Editor,
    Sir,
    The article was ruined by a robot that can not decipher a “700, 37 to 800” from an aircraft (the ‘7 3 7’ ‘800’) or the A321.
    I wonder what kind of mess “it/she” would make of the “A380-800” or even the Queen of the Skies, the “748” (Boeing, not BAe) or even the “An125-150.”
    Robots are great for building cars, but make a story line more than a little difficult to listen to.
    I do feel for those listening to/watching future articles when everything is done by robots.
    Sincerely…
    etc…

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