LATAM Airlines, motivated by the exponential growth in e-commerce shipments and the availability of more resources resulting from restructuring, is accelerating plans to grow its cargo fleet up to 75% in three years with the conversion of up to eight Boeing 767 aircraft from its passenger fleet.
The decision is the latest example of cargo airlines snapping up the prized medium-size aircraft as passenger airlines discard them in favor of smaller, modern aircraft that are profitable to operate in a depressed travel market. 767-300s have become the midrange freighter of choice for express carriers and other operators involved in supporting e-commerce.
Santiago, Chile-based LATAM Airlines Group, which currently operates 11 767 all-cargo aircraft, said Tuesday it has four confirmed slots with Boeing Co. (NYSE: BA) to retrofit the 767-300 Extended Range jets, with redelivery between 2021 and 2022. The work will be performed by Boeing’s licensed engineering partner in Singapore, LATAM spokeswoman Maria Teresa Escobar said.
Boeing outsources modification work based on its conversion kit to a number of global companies, including ST Engineering in Singapore. ST Engineering late last year added a second assembly line for 767-300 conversions.
LATAM also has options with Boeing for four additional conversion orders that would bring its cargo fleet to 19 aircraft in 2023.
Escobar said the company planned to expand the fleet more gradually over four years but moved up the initial tranche to take full delivery within two years.
“These conversions will enable [LATAM’s] cargo affiliates to grow in key segments such as the Colombian flower market or imports to Brazil,” LATAM Cargo CEO Andrés Bianchi said in a statement. “It also allows our affiliates to expand their network in domestic markets where e-commerce is rapidly generating an increase in air cargo traffic. Growing with Boeing 767-300s is extremely efficient as it is the optimal aircraft for all these undertakings and we can take advantage of the benefit of operating a single fleet type.”
Officials said the ability to invest sooner in freighter conversions was made possible by the company’s Chapter 11 bankruptcy process. Last year, LATAM and its affiliates in Chile, Brazil, Colombia, Ecuador, the U.S. and Peru filed for bankruptcy protection in the U.S. after suffering a dramatic loss in business due to the coronavirus pandemic.
Converting passenger aircraft to full-time cargo mode can take three to four months. The process includes stripping the interiors, cutting a new cargo door into the fuselage, adding reinforced flooring with rollers for maneuvering pallets, covering windows, and adding a rigid barrier behind the cockpit.
IBA, a provider of aviation advisory and appraisal services, said in a recent report that more than 40 B767-300ERs have been added to the global freighter fleet since last May, and an additional 26 are set to be converted in the next 12 months.
LATAM increased flight frequencies in some markets by 40% last year and deployed some passenger aircraft for exclusive cargo operations to help meet freight demand.
In related news, the first of three 767-300s sold by Austrian Airlines to Austin, Texas-based MonoCoque Diversified Interests LLC departed Vienna on Tuesday for Pinal Airpark in Arizona, the airline said. The next transfer flight is scheduled for May.
MonoCoque is an engine management provider and aviation investment fund that recently began acquiring fleets of used aircraft. The company could not be reached for comment about its plans for the aircraft, but options include selling or leasing intact planes, and separating them into airframes and engines for sale as parts.
With an average age of 28.5 years, the three B767s sold are among the oldest aircraft in Austrian Airlines’ fleet. It has three other 767s that are 20 to 22 years old. The long-haul fleet includes six Boeing 777s.
Austrian Airlines has also removed 10 Dash turboprops from the fleet, with an additional eight and seven Airbus A319 jets scheduled for retirement in early 2022 for a total capacity reduction of about 20%.
Austrian will operate about 60 aircraft in 2022.