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E-commerce spurs Qantas to convert A330 jets for cargo operation

New A321 freighters already busy flying parcels for Australia Post

A Qantas A330 passenger jet. The airline is taking two of the planes and modifying them to fly freight. (Photo: Qantas)

Australian airline Qantas said Tuesday it will convert two Airbus A330-200 medium widebody passenger aircraft into freighters to support growing cargo volumes driven by the shift to e-commerce. The carrier’s all-cargo fleet will immediately expand this week with the delivery of its third Airbus A321 converted freighter, a narrowbody aircraft, that will operate for Australia Post.

Qantas, which currently operates 22 dedicated cargo jets, is following a similar path as Air Canada by repurposing its own passenger aircraft for use by its in-house cargo division.

One of the converted widebody freighters will join the dedicated fleet that serves Australia Post’s domestic parcel and mail business and the other will be used in Qantas Freight’s international network. The converted A330s will be able to carry about 55 tons of cargo per flight, more than double the capacity of other freighters operating for the national postal service.

E-commerce in Australia has grown by more than 76% compared to 2019 as social distancing during the pandemic pushed more direct-to-consumer sales, a trend that is taking place around the world. Last December Australia Post delivered a record 52 million parcels and airlifted more than 16.3 million pounds of airfreight and expects to eclipse those volumes this year, according to CEO Paul Graham.

Qantas CEO Alan Joyce said the significant addition of dedicated cargo capacity reflects the demand for airfreight service.

“Our freight business has boomed during the pandemic and while some of that is temporary, COVID has accelerated the permanent expansion of e-commerce and online shopping in this country,” Joyce said in the announcement. “That’s why we’re working with key partners like Australia Post to respond to this structural change and increase the amount of parcels that we can carry by air to ensure they arrive at people’s homes as quickly as possible.

Boeing and Airbus forecast air cargo, including express shipments, to grow at an average compound annual rate of about 3% to 4% over the next 20 years, although pandemic circumstances currently have air cargo volumes about 9% above 2019 levels, according to the International Air Transport Association.

Qantas said it will decommission the two A330s from its passenger fleet and send them to Elbe Flugzeugwerke (EFW), a joint venture between Airbus (DXE: AIR) and Singapore’s ST Engineering, for reconfiguration into pure freighters. EFW said one of the aircraft will be refurbished in Dresden, Germany, and one at ST Engineering’s maintenance repair shop in Mobile, Alabama.

The airline said it will make up for the lost seat capacity by more efficient scheduling and take delivery of three new Boeing 787-9 Dreamliners in 2022.

The first A330 aircraft, to be utilized by Australia Post, will start its conversion in August and is expected to start operating in mid-2023 with the second to start operating in late 2023.

The A321 converted freighter previously was part of Qantas low-cost subsidiary JetStar and will join the freighter fleet in time to help Australia Post with the delivery rush for Christmas. It has a payload capability of about 22 tons.

EFW also is the airframe remodeler for Qantas Freight’s three A321s. In October 2020, Qantas became the first company to operate an A321 converted freighter. EFW has since produced several more aircraft for customers, including the two for Qantas, with total orders of about 35 to date. 

The planes are attracting strong interest from express delivery companies and regional cargo airlines with heavy e-commerce traffic as an alternative to the Boeing 737-800 because of their bonus container space in the lower hold, fuel economy and versatility making frequent shuttle runs. EFW is adding production capacity for the A321 and A330 in the U.S. and China as it fends off competition from U.S.-based 321 Precision Conversions, which last spring received Federal Aviation Administration approval for the design of its modification kit and is now producing converted freighters with the support of licensed overhaul outfits. 

Conversions require extensive engineering design and manufacturing skill to rip out the guts of a plane and reconfigure the superstructure to handle heavy containers on what used to be the passenger deck. Work includes removing seats, replacing the cabin door with a large cargo door, reinforcing the floor and side walls, and installing a cargo handling system. 

Industry sources say an A321 conversion runs about $6.5 million. An A330 retrofit will run about $21 million by 2025, when more manufacturing capacity is in place to handle the latest orders. By providing its own aircraft, Qantas isn’t incurring any costs to acquire assets on the secondary market. 

Air Canada

On Sunday, Air Canada’s first Boeing 767-300 freighter, converted by Israel Aircraft Industries, landed at its home base in Toronto. The airline plans to soon deploy the all-cargo aircraft to key destinations in the Americas. It will fly freighters to Europe too as more planes are delivered. 

Air Canada (OTCUS: ACDVF) established a freighter division this year after huge success operating cargo-only passenger flights during the pandemic to help shippers deal with a capacity crunch caused by the collapse of passenger travel. It initially plans to have eight older 767 converted freighters that were claimed from its passenger business. Air Canada sold the first two 767s to Cargo Aircraft Management Inc., the leasing arm of Air Transport Services Group (NASDAQ: ATSG), earlier this year. The ATSG subsidiary is outsourcing the engineering and mechanical work to IAI and then leasing back the aircraft to Air Canada.

Air Canada Cargo said the 767 freighters will offer five different main deck configurations, increasing the overall capacity to more than 62 tons and 15,000 cubic feet.

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


A321 converted freighter debuts with Australia Post

Airbus to expand freighter conversion lines to US, China

Israel aerospace firm launches cargo conversion program for Airbus A330

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Eric Kulisch

Eric is the Supply Chain and Air Cargo 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 and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He won Environmental Journalist of the Year from the Seahorse Freight Association in 2014 and was the group's 2013 Supply Chain Journalist of the Year. In December 2022, Eric was voted runner up for Air Cargo Journalist by the Seahorse Freight Association. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. He has appeared on Marketplace, ABC News and National Public Radio to talk about logistics issues in the news. Eric is based in Vancouver, Washington. He can be reached for comments and tips at [email protected]