The Farnborough International Airshow outside London was an opportunity for aerospace manufacturers, suppliers, airlines, technology and energy companies, and aviation enthusiasts to finally meet for the first time in four years because of COVID, promote new deals, make new alliances and discuss issues key to aviation’s future. Air cargo took center stage, with several orders for freighter aircraft and developments related to freighter conversions during a show that was relatively short on new airplane orders given the uncertain economic environment.
Boeing (NYSE: BA) was the winner in total aircraft and freighter orders at last week’s event. Airbus did not land any contracts at Farnborough for the A350, its answer to Boeing’s new large freighter, the 777-8, or for any freighter conversions. But Airbus has done well year to date and didn’t seem too concerned with making a publicity splash. On Monday, in fact, German leisure airline Condor announced a fleet renewal with 41 A321 neo passenger jets.
The announcements at Farnborough give insight to the future of the air cargo market, where companies see growth opportunities and how much new capacity will be available to support global commerce in coming years. Many of the airline and lessor decisions are motivated by robust growth projections for e-commerce and the need for speed to support order fulfillment.
Boeing’s commercial market outlook, released before Farnborough, projects an 80% increase in the global freighter fleet through 2041, including about 940 new widebody freighters.
Boeing’s challenge will be delivering aircraft. It already faces a huge backlog due to increased government oversight, quality control issues and supply chain delays. It hasn’t delivered a 787 Dreamliner in more than a year.
Here is a rundown of the noteworthy freighter news from Farnborough:
Cargolux sticks with Boeing for 747-400 replacement
Luxembourg-based Cargolux has tentatively selected Boeing’s next-generation 777-8 freighter over the new Airbus A350 to replace its large fleet of 747-400 jumbo cargo jets.
Cargolux is the largest operator of Boeing 747 freighters in Europe, with a combined fleet of 30 747-400s (16) and 747-8s (14). It plans a phased retirement of the -400s in the second half of this decade. The 777-8s won’t be available until mid-2027 and Cargolux isn’t first in line to get one.
Cargolux is the fifth major airline to commit to Boeing’s replacement for the legacy 777 freighter, which is scheduled to end production in late 2027 to comply with new U.S. and international rules for reducing emissions and noise. Boeing has booked more than 50 orders since introducing the 777-8 in January, but the first editions won’t be available until mid-2027.
Saltchuk Aviation to send 767s to Boeing for conversion
Saltchuk Aviation, the parent company of Aloha Air Cargo, Northern Air Cargo and StratAir, booked reservations with Boeing to convert three more used 767-300 passenger jets into main-deck freighters.
Saltchuk Aviation’s subsidiaries provide cargo service to Hawaii and Alaska, as well as destinations throughout North America, Central America, the Caribbean and South America. Saltchuk Resources also owns Tropical Shipping, an ocean line serving the Caribbean and Bahamas; Tote, a domestic shipping line serving Alaska and Puerto Rico; and several logistics companies.
Saltchuk Aviation placed a firm order for four 767-300s in early 2021. The first reconfigured medium widebody from the original deal was delivered to the carrier earlier this month, Boeing said.
“We continue to see long-term air cargo trends that support fleet growth in the markets served by our three air cargo brands and are excited to expand our partnership with Boeing,” said Saltchuk Aviation President and CEO Betsy Seaton. “Converting these 767-300ER will bring highly-reliable capacity to our network, and backed by Boeing’s OEM expertise, we expect these freighters to operate in our fleet for the next 15-20 years.”
Saltchuk Aviation currently leases four Boeing 767-300s from Air Transport Services Group (NASDAQ: ATSG). It owns the plane delivered by Boeing and each plane in the initial order and will directly acquire the 767s for the second tranche sent to Boeing facilities for conversion, spokesperson April Spurlock said in an email. The combined fleet also includes 10 Boeing 737-300 and 737-400 converted freighters and one 737-800.
Lessor BBAM tops up order for 737-800 freighter conversions
San Francisco-based BBAM Aircraft Leasing & Management reserved production slots with Boeing to transform nine more 737-800 passenger jets into pure freighters. The agreement brings BBAM’s total commitment for the converted freighter to 40.
BBAM will be the first customer to receive a conversion at a new modification facility set to open next year at KF Aerospace, a maintenance, repair and overhaul provider in Kelowna, British Columbia. In November, Boeing announced plans to open two 737-800 conversion lines at KF Aerospace, which is using a Boeing design and kit to install a cargo door, remake the interior and incorporate a cargo handling system.
Georgia Airlines signs for 3 Boeing 737-800s conversions
Boeing announced that Aircompany Armenia and affiliated Georgian Airlines have reserved slots to convert three 737-800 aircraft as part of the group’s plan to add more dedicated cargo airplanes to its operations in the Caucasus region.
Boeing said it will redeliver the first modified aircraft next year, with deliveries continuing into 2024. The converted freighters will be operated by Georgian Airlines, a startup cargo carrier based in Tbilisi that commenced operations in April 2021 and serves Europe, the Baltics, the Middle East and parts of Asia. The company operates two converted 737-800s, one by Boeing and another from an independent conversion provider.
Brazilian airline Gol makes leap to freighters
Low-cost Brazilian airline Gol Linhas Aéreas Inteligentes S.A. announced in April the launch of a new freighter division. At Farnborough we learned where the aircraft will come from.
AerCap Holdings (NYSE: AER), a major aircraft leasing company, said it signed a contract with Gol to lease six 737-800 freighters converted by Boeing from passenger configuration. Three of the aircraft are scheduled for delivery in the second half of the year, with the remaining planes to be completed in 2023.
Gol will operate the aircraft across South America for Mercado Livre, the Brazilian subsidiary of Argentine e-commerce giant Mercado Libre, under a 10-year contract. Operations are scheduled to begin in the third quarter. Gol previously said it has options to add six more 737 cargo jets by 2025.
Gol is familiar with the 737-800, operating 84 of the standard passenger jets through the end of last year. It is phasing out 10 -800s as it grows its 737 MAX fleet. Brazil’s largest airline expects to operate 136 aircraft by the end of 2022, including older 737-700s.
1st Embraer E190 converted freighters to fly in Africa
Nordic Aviation Capital, specializing in regional aircraft, said it had struck a tentative agreement to place the first two Embraer E190 passenger-to-freighter conversions with Nairobi, Kenya-based Astral Aviation.
Nordic Aviation has reserved up to 10 production slots from Embraer for conversion of E190/E195s into cargo jets, with first deliveries scheduled for 2024.
The E190 and E195 are small narrowbody aircraft that sit between standard Boeing 737s and large turboprops. Embraer says the E190F will have a payload of 23,600 pounds, while the E195F will carry up to 27,100 pounds.
Astral Aviation says it will utilize the E190s on a combination of scheduled and charter flights within its African network.
Brazil-based Embraer launched the E-Jet conversion program in early March as a modern, fuel-efficient, less-polluting replacement for aging freighters in its size class, such as the MD-80 and CRJ200, or even older 737 Classics such as the 737-300. It has the potential to fit a niche within express carrier networks, covering short, regional routes on a daily basis.
Embraer says E-Jet freighters will have 50% more volume capacity and three times the range of large cargo turboprops and up to 30% lower operating costs than older 737 converted freighters. It’s not clear if the cost comparison applies to the 737-800, the newest version of the 737 to be reconfigured for dedicated cargo use.
De Havilland offers conversion options for Dash-8 400
De Havilland Aircraft of Canada launched a range of conversions for Dash-8 400, and Ethiopian Airlines inked a deal to be the first operator of the large cargo door-version.
Ethiopian said it sees great value in converting older Dash-8 400s from its passenger fleet (32 currently in operation) to permanent cargo aircraft. It plans to get two aircraft converted, with an option for two more, pending a final contract.
Ethiopian’s cargo division currently flies nine Boeing 777 freighters, plus three standard-size 737-800 converted freighters. It recently ordered five more 777-200 Long Range freighters from Boeing as part of a major expansion. A preliminary deal for five 777-8s has yet to be concluded.
The different Dash-8 400 configurations are designed to address a variety of operational business models.
The Dash-8 400 Quick Change version enables operators to switch back and forth between all-passenger and all-cargo configurations, which is often useful for routes serving more remote regions. De Havilland will install a new smoke detection system in the cabin to convert the aircraft to a Class E compartment, meaning no personnel are required in the cabin for cargo flights. The changeover requires removing and reinstalling the seats, as needed.
The Package Freighter is targeted for parcel shipments. It allows bulk loading of various sizes of cargo in nine separate stowage zones held down by spider nets. The primary cargo access door is the same position as the rear baggage compartment door, with four additional access doors (one at the front and one at the back on each side of the aircraft) to facilitate quick loading and unloading of cargo. An optional cargo loading system is also available for palletized cargo, De Havilland said.
The Dash 8-400 Package Freighter can be equipped with a large cargo door and a cargo loading system for transport of small, standardized pallets or containers. Containerization enables interline transfers between aircraft, ideal for carriers with hub-and-spoke systems.
At the beginning of the COVID pandemic, De Havilland offered a modification kit for carriers temporarily interested in removing seats while travel business was halted so light cargo could be stacked in the cabin.
The small freighter space is getting more crowded with the new ATR 72-600 and Textron Cessna SkyCourier turboprop freighters, as well as the Embraer E190/195 jet.