Logistics giant Kuehne+Nagel offers airlines or lessors end to end logistics solutions to facilitate passenger to freighter aircraft conversions. The market is there since uplift capacity is scarce, as evidenced during the current COVID-19 pandemic. Therefore, giving passenger jetliners a second life as freighters is an attractive business case, K+N believes.
Paris, New York, Hong Kong, or Frankfurt – these and other airports all around the globe are packed with parked passenger aircraft that have become COVID-19 victims and been taken out of service. It is doubtful whether all these Boeing and Airbus jetliners will take to the air again once the pandemic fades out and air travel revitalizes. In its latest 2020 Market Forecast, U.S. manufacturer Boeing speaks of 2,430 freighters needed within the next two decades, of which 1,500 will be P2F conversions. The aircraft are readily available, standing idle at those airports mentioned, for example. Instead of ending up on a scrap heap, most of them qualify for cargo conversion, thus could add to the capacity provided by existing fleets and those newly built production freighters still to come.
versus life as a freighter
When looking at the broader picture, K+N decided to take action. Its aviation experts did not have to develop things from scratch, since the company already offers customers a ‘KN InteriorChain’ product, focused on the passenger sector. The basic prerequisites were therefore in place to expand this service to include cargo and focus on P2F conversions, thus opening up an additional field of business. Senior VP Erik Goedhart, Global Head of Aerospace at Switzerland-based Kuehne+Nagel, mentions three reasons leading to this decision: All forecasts predict a sustainable growth of air cargo during the next 20 years, averaging 4% annually, so transport capacity is needed long-term. Secondly, e-commerce is unstoppable and will keep growing rapidly. Thirdly, the pandemic led to the loss of up to 70% of belly cargo capacity. “In webinars with our customers, these three issues - especially the shortage of lower deck capacity - were major points of discussion and concern, which signaled to us that there is need to tap into this business field,” the executive states.
At this point it should be emphasized that K+N does not intend to turn into a maintenance, overhaul, and repair shop, and physically convert P2F aircraft itself. Instead, “we offer tailored end-to-end logistics solutions for airlines, leasing companies, or MRO facilities,” Erik Goedhart emphasizes. In other words, its product is a one-stop service provided by a single source. This way, complexity is reduced, transparency enhanced, and conversions are accelerated, he adds.
Encouraging was that the wheel did not have to be invented anew, since its proven KN InteriorChain product was already in place. While the product’s main tasks consisted of equipping passenger aircraft with new seats or a more user-friendly galley and other modernization measures, now it has been enhanced to encompass supplying all the necessary freighter-specific components. Examples are main cargo doors that need on-time delivery so that they can be installed according to plan. The same goes for cargo loading systems, floor reinforcements, roller beds to easily move pallets or containers within the main deck of an aircraft, or material with which to plug passenger windows.
Material quality control has utmost priority, Erik Goedhart emphasizes. “We do incoming quality inspections for customers if that is requested of us. The incoming inspection also prevents bogus parts from sneaking into the material chain,’’ the manager pronounces. The inspections can be even more strict if combined with checkups at the source.
The same goes for costs that quite often exceed business plans. Flying a 600 kg cargo door to an MRO provider is expensive. According to the K+N manager, “this happens frequently.”
Therefore, starting early engagements with vendors helps in finding a fitting component which then can be forwarded to the place needed by ocean, rail, or road, lowering expenditures compared to air freight, Mr. Goedhart explains, describing a typical case. “Once we receive a procurement order from an airline or lessor, we take care of getting the pieces needed and deliver them in time.” It resembles the passenger refurbishing business, he adds, since the principals are the same.
Same business, different parts
Although cargo does have a different supply basis and special structure parts manufactured in Japan, Korea, or elsewhere, the delivery of these parts is not fundamentally different from the procedure involved when converting passenger aircraft interiors. To put it in a nutshell: “We make sure that through fully digitalized ordering and supply processes managed by us, all pieces and parts required for a given P2F conversion are delivered and available in time, in this way securing consistent workflows and removing the complexity from P2F conversions.” Asked how the market reacted to the product announcement, Mr. Goedhart says that several airlines and leasing companies have responded very positively.
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