• ITVI.USA
    15,913.180
    -35.240
    -0.2%
  • OTLT.USA
    2.793
    -0.005
    -0.2%
  • OTRI.USA
    22.300
    0.290
    1.3%
  • OTVI.USA
    15,900.990
    -35.610
    -0.2%
  • TSTOPVRPM.ATLPHL
    2.950
    -0.570
    -16.2%
  • TSTOPVRPM.CHIATL
    3.610
    0.650
    22%
  • TSTOPVRPM.DALLAX
    1.370
    -0.240
    -14.9%
  • TSTOPVRPM.LAXDAL
    3.550
    0.210
    6.3%
  • TSTOPVRPM.PHLCHI
    2.320
    0.220
    10.5%
  • TSTOPVRPM.LAXSEA
    4.110
    0.250
    6.5%
  • WAIT.USA
    126.000
    0.000
    0%
  • ITVI.USA
    15,913.180
    -35.240
    -0.2%
  • OTLT.USA
    2.793
    -0.005
    -0.2%
  • OTRI.USA
    22.300
    0.290
    1.3%
  • OTVI.USA
    15,900.990
    -35.610
    -0.2%
  • TSTOPVRPM.ATLPHL
    2.950
    -0.570
    -16.2%
  • TSTOPVRPM.CHIATL
    3.610
    0.650
    22%
  • TSTOPVRPM.DALLAX
    1.370
    -0.240
    -14.9%
  • TSTOPVRPM.LAXDAL
    3.550
    0.210
    6.3%
  • TSTOPVRPM.PHLCHI
    2.320
    0.220
    10.5%
  • TSTOPVRPM.LAXSEA
    4.110
    0.250
    6.5%
  • WAIT.USA
    126.000
    0.000
    0%
Air CargoAmerican ShipperLogisticsNewsSupply Chains

Kuehne + Nagel expands aerospace logistics offering to freighter conversions

Switzerland-based Kuehne + Nagel International AG has developed a turnkey logistics service to support companies involved in converting passenger aircraft into freighters, a market that is expected to grow faster with demand for express delivery of e-commerce orders and plenty of idle aircraft to choose from because of the coronavirus-induced aviation recession.

The world’s second-largest third-party logistics provider by gross revenue is building off its existing supply chain service, KN InteriorChain, that helps airlines retrofit and refurbish cabin interiors, and perform heavy maintenance visits in which the entire aircraft is usually taken apart for inspection and overhaul.

The new concept is aimed at maintenance repair organizations that make the structural modifications as well as leasing companies and airlines interested in generating revenue from aircraft that still have useful life. 

“With the new passenger-to-freighter aircraft conversion program, we now offer a reliable end-to-end solution to manage conversions of retired passenger aircraft into a long-lasting freighter so our customers can scale up their operations, reduce costs and boost cargo capacity,” said Erik Goedhart, senior vice president and global head of aerospace at Kuehne + Nagel, in a statement this week.

The company is currently presenting the concept to potential customers and says feedback is encouraging.

Although cargo aircraft generate less lease revenue than passenger aircraft, freighter conversions can help owners recoup their investment and is often a better alternative than long-term storage or having a fire sale, according to industry experts. A contract logistics company can help reduce production costs, a key variable in determining whether a conversion makes economic sense.

Boeing Co. (NYSE: BA) last month forecast a need for 1,500 additional passenger-to-cargo conversions by 2040, with e-commerce and pharmaceutical shipments stimulating greater demand for conversions of both wide- and narrowbody aircraft. All-cargo carriers continue to acquire converted freighters, but some airlines may follow Air Canada’s lead to get in the freighter business after experiencing robust cargo volumes this year operating temporary passenger freighters in the absence of passenger business.  

Demand is also expected to be high for the new Airbus A321 converted freighter, the first of which entered the market in October for Qantas. The planes are prized for their extra lower-deck efficiency, fuel economy and relatively young age. The conversions are being done by Elbe Flugzeugwerke (EFW), a joint venture between aircraft manufacturer Airbus and ST Engineering in Singapore, and U.S.-based 321 Precision Conversions. A Chinese company, Sine Draco Aviation Technology, is also preparing to enter the market by early 2022.

Other conversion houses around the world include Boeing; Israel Aircraft Industries; Commercial Jet in Miami and Dothan, Alabama; KF Aerospace; Hong Kong Aircraft Engineering Co.; and Pemco Conversions in Tampa, Florida.

Freighter conversions require extensive engineering work, including the installation of a larger, main deck cargo door through which to fit pallets; removal of seats, overhead bins, lavatories and other passenger amenities; and installation of floor supports and panels to accommodate heavier loads and a rigid barrier to protect the cockpit from shifting loads.

K+N will act as the single point of control for ordering, managing suppliers, freight transportation, inventory, inspecting inbound shipments, coordinating materials, customs, warehousing scrapping and recycling discarded components. K+N will then stage the inbound components near the plant and deliver them when the plane is in the hangar and ready to be remodeled.

Goedhart said K+N’s conversion logistics service could also help airlines that opt for short-term removal of cabin seats to add cargo space, although such an operation is less a supply chain issue than one of manhours to do the work.

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

RELATED NEWS:

Why the A321 converted freighter looks like a hot ticket

New A321 converted freighter passes first test flight in US

Airbus A321 embarks on second act in e-commerce

Boeing says e-commerce, trade shifts drive future demand for freighters

Air Canada finalizes decision to convert aircraft to freighters

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

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