Israel Aerospace Industries (IAI) expects to open its new Abu Dhabi passenger-to-freighter conversion (P2F) facility in the second half of this year. The facility could convert up to 100 Boeing 777-300ERSFs, IAI Aviation Group v-p and general manager Shmuel Kuzi said on the eve of the Paris Airshow.
“We’re going to get the supplemental type certificate [STC] in the third quarter,” he told AIN. “They will start work around June or the beginning of July.”
Etihad Engineering’s site at Abu Dhabi International Airport will serve as the first conversion center IAI opens outside Israel for Boeing 777s. Meanwhile, as of 2024 at the earliest, it expects to perform conversions in Singapore with ST Aero and Sharp Technics in Korea. It also has its sights set on the U.S. “We are checking options over there,” he said. “At the end of the day, we’ll have four or five locations for B777 conversions. Abu Dhabi is going to be a very important conversion station for us. We’re working closely with the UAE and everything is going well.”
Starting with two lines, and growing to three or even more, Kuzi said Abu Dhabi could one day serve as a center of excellence for conversion. “As of now there are two lines but it will grow and the number will depend on a few factors—such as hangar and facility availability,” he said. “As it grows, we are hoping to convert other aircraft types.”
Kuzi claims customers have placed tens of orders for Boeing 777s. In 2021, Emirates ordered four B777-300ERSFs from IAI. They’ll likely undergo conversion in Abu Dhabi, as will feedstock from the 2019 agreement between IAI and GE Capital Aviation Services (Gecas) for the conversion of the so-called “Big Twin,” a program to which the lessor originally committed a firm order for 15 and options on another 15.
IAI declined to clarify whether the first B777ERSF handed over for conversion in Abu Dhabi would come from Emirates, the Big Twin program, or from another source, citing the matter’s sensitivity.
“In about two years from now, we will start on the [Airbus] A330,” added Kuzi. “We are already working on the narrowbodies and will begin working on the widebodies which, will likely lead to us opening more facilities. But, for now, we are focused on the four or five that I mentioned.”
IAI will obtain STC approval to convert the A330 from the Civil Aviation Authority of Israel and, through bilateral agreement, the FAA. “We will expand it to EASA and other authorities around the world,” he said.
Work has already begun on a Boeing 767 conversion at a site at Belgrade’s Nikola Tesla Airport. “Serbia is the site for B767s and as of now; there is one aircraft in the advanced stages and there is already another one waiting on the line,” Kuzi said.
Slowdown in Traffic
Chris Seymour, head of market analysis at Ascend by Cirium in London, said freight traffic has slowed recently as economic headwinds had hit trade. However, he noted 2023 would be a record year for conversions as e-commerce and replacement needs generated a demand for about 200.
“Orders for conversions have been slowing—we saw some 270 announced in 2022, down 100 over a year earlier, and 30 announced to date in 2023,” he told AIN. “Backlog is around 520. There are some customers now deciding to defer conversions, and 2023 could well be the peak for conversions in the current cycle.”
Top converters, based on the announced backlog, included Germany’s Elbe Flugzeugwerke at 26 percent, IAI at 24 percent, Boeing at 18 percent, Aeronautical Engineers at 12 percent, and Precision Conversions at 9 percent. New players developing STCs included Fort Worth, Texas-based Mammoth and Kansas Modification Center on the 777, Embraer on E-Jets, Nanchang, China-headquartered Sine Draco and San Diego’s C Cubed on A320s/A321s, and the UK’s Avensis on A330s.
“Of the 146 jets converted in 2022, 81 were done in Asia—63 in China and 18 in Singapore,” said Seymour. “It is expected that close to 200 conversions will be done in 2023—60 were already done by early May—as extra lines are being opened. For example, we recently saw the first A330 conversions at Starco in Shanghai and Boeing is adding a 737-800 BCF line at GMR in Hyderabad.”
Seymour believes the 737-800 will lead all conversions again in 2023, at a projected 80 aircraft, as more airlines look to add the type, some of which have not played in the full freighter market before. He said the convertible feedstock of 767 and 757 models has begun drying up, leading to an inevitable market shift to the 777 and A330.
“The 757 is winding down in the next two years, with the market shifting to the A321; the 767 still has a good backlog in 2023 and 2024 but the focus is now shifting to the A330, which has two more programs [IAI and Avensis] in development to join EFW,” he said.