Much has been discussed of late regarding the need for long haul freighters in the future. Here, different opinions exist - some say no and others yes.
However, during these heated debates nobody has seriously debated the need for short or medium haul narrow body freighters in the present or future airfreight environment.
Miami based Aeronautical Engineers (AEI) has formally launched a cargo conversion program for the popular Boeing 737-800 aircraft. This decision follows a year long study by the company as to the viability of such conversions and it seems that AEI has now gone into what they term as the “zone of conversion.”
Why then the B737-800 and what makes them sure it can be marketed?
There are various factors which have convinced AEI to enter this program which will take between two-and-a half to three years before the first converted -800s are on the market.
Is there a market for this aircraft?
It seems so! AEI is putting quite a lot of their financial commitment into this project.
Many carriers are looking themselves at creating their own inter-regional feeder services to complement the long haul traffic passing through their hubs.
We’ve seen this in Russia with Volga-Dnepr having placed its daughter company Atran, more and more into the market. Admittedly, this carrier who operates with B737-400Fs flies mostly for others and more or less in the “small parcels” market.
However, AirBridge Cargo, also part of the Volga-Dnepr Group, is going to have to offer its clients within the Russian Federation more direct and speedy transfer of cargo to the Russian hinterland. Today’s road and rail connections are more “counter-productive” than beneficial.
Another market is Africa
We will experience an even faster pick-up of Far East carriers, specifically from China, who will operate freighter services to main African hubs such as JNB, NBO, ADD and so on. Much of this cargo will be destined to smaller cities on the African continent, whereby the need for fast transfer will become more important.
We already have witnessed start up narrow body carriers in this region who are mainly operating with much older and less economic aircraft.
And then there still remain carriers such as UPS, Fedex and DHL who sub-contract such services and who may need to expand them also in the near future!
- almost 170 carriers worldwide operate a total of over 3,100 B737-800 passenger aircraft with a further 1,400 on Boeings order books.
- the 737-800 is by far the most popular aircraft on lessor’s books and due to the number in service and on order, probably the most accessible aircraft in the second hand market.
- AEI’s view is that by the time the first versions come off the line in 2017, narrow body operators who will need better economics to survive, will be more than happy to consider purchasing this aircraft.
- narrow body freighter demand will have increased by then, especially in Africa and Russia - primarily for inter-regional feeder traffic.
- aircraft which can be slated for conversion will be in the 15-20 year age bracket and will be replaced automatically in passenger services by the new generation of 737s - the so called “B737-8/9 Max series.”
One of the most dominant deciding factors for such ventures is of course “cost.”
This means that the used price market of the B737-800 series over the coming three years will play a large role in future demand for converted types of this aircraft.
Back in 2006/2007, B737-400s were being sold for conversion into freighters at used prices of between US$9-15m per aircraft. Today’s oldest 737-800s which date back to 1997 are on the market already for around the US$15m price bracket.
Is then the B737-800F a suitable aircraft for the future?
Compared to the present and popular B737-400F it offers quite some advantages:
- a low enough sale price by 2017 which remains within the present price range and therefore can be economically good for such operations.
- it can be offered in two versions - either full freighter or combi. The latter being maybe of greater interest in Africa.
- as full freighter it offers 12 pallets (one more than the B737-400F) and a payload of almost 24 tons.
- the “combi version” can give 6 main deck pallets with almost a 14 ton payload along with space for 90 paying passengers.
- a full freighter version operating between 2-3 sectors daily can give an attractive uplift to its users.
It’s an interesting narrow body freighter development, but as mentioned above, cost will be paramount in future operator’s minds alongside the demand in secondary or non-hub market places.
John Mc Donagh