Following an agreement signed by Israel Aerospace Industries (Stand 300) and Etihad Engineering (Stand 1110) in August, the Abu Dhabi site earmarked as the likely location for the first Boeing 777-300ER conversion center outside Israel could go into operation in as little as 12 months, Yossi Melamed, general manager, IAI Aviation Group, told AIN in an interview.
“I believe that that by the end of 2022, or the beginning of 2023, the site is going to be ready for its first conversion," he said. "It will take us about a year to prepare. We have to adapt the culture, build up the toolkits, and train and educate the team. They will also have to pass on-the-job training.”
Melamed add that the site would be located at Etihad Engineering’s Abu Dhabi International Airport facility, where two 777-300ERSF lines would operate. “They have a very good, high-quality MRO center there,” he said. “The good thing with Etihad is that they already have [two] hangars, but we have to prepare them for conversion.”
Melamed remarked on the quality and cleanliness of the site, as well as the dedication of the staff at Etihad Engineering. Training accounted for an important part of the agreement, with 20 Etihad staffers likely to travel to Israel for on-site training at IAI’s home conversion facility.
Initially, at least, he expects a small number of Israeli engineers to work on the ground in Abu Dhabi with the Etihad team. “We will have a couple of people on each aircraft,” he said. “At the end of the day, the responsibility is very high—we are the owner.”
Melamed explained how the deal came about after Israel and the UAE signed the Abraham Accords in 2020, and how, even before that milestone, IAI had assessed Etihad Engineering as a “very good MRO competitor.”
He sees strong demand for ERSF conversions. “I think that the coming year will be important for long-haul widebodies; they are the only replacements for the old Boeing 747s and the MD11s," explained Melamed. "I believe that e-commerce will continue to grow. Actually, new highs are being achieved every year.”
In 2019, IAI and GE Capital Aviation Services (Gecas) launched the Boeing 777-300ERSF program, a P2F conversion scheme known as “The Big Twin,” marking it out as the largest-ever twin-engine freighter. “The 777 will be a good replacement for the four-engine aircraft, which consume a lot of fuel,” he said.
IAI will keep the Bedek Special Freighter (BDSF) brand for all 767s, while it refers to the 777 as the ‘Extended Range Special Freighter’ or ‘ERSF,’ to emphasize the long distances it can fly.
First 777-300ERSF Underway
IAI said it started the conversion of the first 777-300ERSF in Tel Aviv in August for delivery in 2022 to launch customer Kalitta Air. Melamed said initial Abu Dhabi conversion units would not likely come from UAE airlines but rather from those outside the Middle East hesitant to send aircraft to Israel for conversion.
“There will be other customer groups to start with," he stressed. "With regard to our business relationship with Emirates and Etihad, I prefer not to comment. If something happens, we will publish it. We see Abu Dhabi as a global site, not a local Gulf site. We didn’t open it just for conversions of aircraft from Gulf airlines.”
Today, of up to 17 conversion slots in Israel, IAI runs seven for the Boeing 767, all of which are committed until 2024 to 2025. However, Melamed does not face a capacity shortage. “We want to convert 777s immediately for 2023," he said. "I want to believe that the 767s will continue and that in parallel, there will be 777s, as well as other types of aircraft, to convert.”
IAI has additional P2F conversion sites in Italy, Mexico, Ethiopia, two in China, and a line in Brazil on hold due to the pandemic. “We are looking for other sites, but we'll manage our business cautiously,” he said. “I expect to deliver about 150 to 155 converted aircraft in the next five or six years, among them several 737s.”
A330, A380 Possibilities
Melamed also referred to Airbus as a good target for conversions. “I believe that A330 is a good candidate; we’ll see in the future about the A380,” he said. “Conversion of the A321 is not a brilliant idea. There’s a lot of market competition and it doesn’t appeal. But the A330 is a good candidate.”
In the past four years, Melamed was asked to unify four IAI civil units: Lahav Aerostructure division, the engineering group, the commercial group, and Bedek Aviation group. “Four years ago, I managed about 2,000 people; today, I’m managing 5,000-plus, with a budget of around $1.5 billion.”
Melamed noted he couldn't predict how delays to the Boeing 777X program would affect the availability of 777 ‘Classic’ feedstock for IAI conversion programs. “At the moment, we can't predict the effect,” he said.
He expects more commercial deals in the Gulf: “We have signed a line maintenance deal with the Bahrainis, we have now signed with Etihad, and I am sure there will be more.”
As to relationships that could develop with military entities like UAE defense conglomerate Edge Group, he said: “I wish there would be a good connection and mutual projects that both countries could work on. I don’t think I am able to talk about them now, but we definitely anticipate that those kinds of connections and projects will happen.”
He expressed certainty more areas for further cooperation will arise. “We have other ideas as good as Etihad," he said. "Could we work with Mubadala, Emirates, or other companies? That’s the nature of our business. We want to find ways to do business and, in an environment of peace, the sky’s the limit. This agreement is good for Etihad, good for the UAE, good for IAI, and good for Israel. We are starting. It’s excellent.”