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Israeli company confirms Cargojet deal for Boeing 777 cargo conversions

Aerospace firm reportedly has 50 reservations to reconfigure large passenger plane as freighter

Israel Aircraft Industries is tearing down Boeing 777 passenger jets and turning them into heavy-duty cargo planes. (Photo: IAI)

Israel Aircraft Industries on Monday announced that it will structurally modify four Boeing 777-300 passenger jets to carry heavy cargo on the top deck for Canadian all-cargo carrier Cargojet, confirming independent reporting by FreightWaves.

The 777 is a larger aircraft than Cargojet (TSX: CJT) currently operates and opens the door to longer-haul business in Asia. The airline publicly declared in November it would buy conversion service for two 777-200s from startup aviation engineering firm Mammoth Freighters, but without fanfare subsequently exercised options for two planes and placed an order with Israel Aircraft Industries. The statement from IAI makes the order, which includes purchase rights for more aircraft, official and brings Cargojet’s projected 777 fleet to eight aircraft. 

Cargojet functions as an express air carrier within Canada for companies such as Amazon (NASDAQ: AMZN), FedEx (NYSE: FDX), UPS (NYSE: UPS) and Purolator, and provides tailored airlift for other customers with a fleet of 31 freighters, mostly medium widebody 767s.  

Michigan-based Kalitta Air will get the first 777-300 off IAI’s production line sometime in the first half of 2023 after aviation regulators certify the aircraft is safe to fly with the structural modification package. IAI tweeted that the first prototype 777 cargo jet is finishing its conversion process. The aerospace and defense firm will convert two more 777s for Kalitta, as well as four for Emirates.

Last year, IAI established extra conversion facilities in Abu Dhabi, Ethiopia and South Korea.  Etihad Engineering, part of the Etihad Aviation Group in Abu Dhabi and the largest maintenance center in the Middle East, will convert the Emirates aircraft under contract with IAI.

The expansion of conversion centers suggests that IAI has many more orders for the 777-300 conversion than publicly acknowledged. In announcing the South Korean production facility last year, it said partner Sharp Technics would retrofit six 777-300 Extended Range and 777-200 Long Range aircraft per year beginning in 2024.

AerCap, the largest aircraft leasing company in the world, is providing the aircraft being converted by IAI, and then leasing them to all-cargo carriers. The lessor’s CEO said during the first quarter earnings briefing on May 17 that the “Big Twin” program, so named because of the plane’s twin-engine capability, has already 15 firm orders and 15 options, with 16 777s under contract or letters of intent equating to $1.5 billion in rental commitments.

Conversion work involves stripping the cabin interior and installing reinforced floor beams and panels, a wide cargo door, a protective barrier behind the cockpit and a cargo handling system for maneuvering large containers. 

(UPDATED: May 29, 2022, 12:15 p.m. ET)

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

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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 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 [email protected]