This applies to the Airbus variants A330-200 and -300, confirms CEO, Jordi Boto of Elbe Flugzeugwerke (EFW), in Dresden, Germany. In an exclusive interview with CargoForwarder Global, he announces ambitious goals for his company. However, airlines knocking on EFW's door today to have an A330-200, or -300 passenger aircraft converted to a freighter, can currently expect to be offered a slot in 2025. In the meantime, EFW is considering new solutions.
New subcontractor strategy
The good news is that this bottleneck situation might be eased, as EFW is evaluating complementary solutions. Details will be published only in the fall of 2022, says the company. However, the strategy to reduce congestion has already been approved by the key stakeholders Airbus (45%) and partner ST Engineering (55%) of Singapore. It reads: EFW entrusts conversions to subcontractors. “We will collaborate with airlines that have high technical skills, the manpower, and the know-how to convert A330 passenger aircraft into freighters at their own technical shops, guided and monitored by us,” explains CEO, Jordi Boto.
He does not reveal which airlines these are, but it is not hard to guess that it will be current operators of the A330-200 or -300 variants, such as China Eastern (30 units), Cathay Pacific (45), Turkish Airlines (49), or Qantas (16). He stresses that EFW retains full control of the retrofitting process performed by third parties, by monitoring all steps.
Ambitious modification targets
In parallel, the converter intends to massively ramp up the conversion rate itself. While in 2020, only 3 A330s were remodeled at its Dresden facilities, the number rose to 5 in 2021. This year, 10 stand on the modification list, followed by 12 in 2023, and 14 come 2024. “We will achieve this maximum rate with the same number of staff,” Mr. Boto proudly announces. Currently, over 1.800 employees work at EFW in Dresden. Their jobs are secure for years to come, as indicated by these figures: According to the manufacturer, last December, a total of 1,338 Airbus passenger A330-200 or -300 were in service at various airlines, with some deliveries still pending. Certainly, a large pool for future P2F conversions.
Some conversions have become unaffordable
In comparison to the A330 retrofitting, different conditions apply to the conversion of the single aisle fleet sisters, A321 and the A320. Since 80% of the work involves labor costs, MRO providers and technical shops in Germany and central Europe claim that such tasks have become too expensive. Based on the existing network of its shareholder, ST Engineering, and depending on where customers are located, EFW works with established MRO and modification sites in China, the USA, or Singapore, where the cost level is significantly lower than in Europe.
EFW forgoes extra profits
The Dresden HQ manages, monitors, and steers the activities of all other units belonging to the company. In this sense, it is the head, while the others execute the strategy. One task, Mr. Boto emphasizes, must be prioritized for the ramp-up of conversions: the production of aluminum and titanium. Both are essential for producing or converting aircraft. They must be brought up to pre-Covid level fast, he urges, addressing suppliers in Japan and the U.S., which have considerable stocks.
In view of the bulging order books, the thought comes to mind that the EFW boss is a kind of Uncle Scrooge of the aircraft modification universe. Nice try, but completely wrong, he says. “The last two years have been the worst in our company's history, because we were hit extremely hard by the Covid-19 crisis. Measured against 2021 annual sales of around 200 million euros, we suffered a loss of well over 10%.” Given the current boom in demand and airlines lining up for P2F conversions of A330s, it can be expected that margins are going through the roof, leading to high extra profits. A logical assumption, but in the case of his enterprise, it is completely wrong, he says. “We want to be a credible, reliable, and long-term partner for our customers.” Preferably for a lifelong period, at least measured in years of aircraft operation. That prohibits ripping airlines off in times with excess demand.
Three solid pillars
This statement is probably not only based on humanistic convictions, but also signals a changed, expanded company strategy. In addition to its core business of P2F rebuilds, EFW is increasingly developing into a provider of MRO (maintenance, repair, overhaul) services and customized engineering concepts. Long-term customer relationships that go beyond the actual P2F modifications are important in this respect.
In addition to the reconfigurations, EFW is also a manufacturer and supplier of components for the different Airbus variants. This includes floor panels, ceiling panels for passenger aircraft, and wall cladding. Every month, the Dresden-based company supplies around 30,000 elements for the two most important Airbus end lines in Toulouse and Hamburg.
TITAN is a definite Airbus convert
When asked about the long-term outcome of the rivalry between Airbus and Boeing in freighter aircraft production and conversion, the manager says that the U.S. manufacturer will be ahead for years to come: “Just look at their current market share that exceeds 90%.” But Airbus is catching up, thanks to the new A350 freighter and, above all, P2F conversions of the A330 and A320 family. He also indicates a technical gap between the A321 and the Boeing B767, and especially the B757, with the latter belonging to the older generation without fly-by-wire navigational assistance. This technical difference was confirmed by Alastair Willson, CEO of Titan Airways, in a recent panel held at CargoFacts EMEA 2022, in Dubai. There, he compared the A321P2F with the B737-400P2, formerly operated by Titan and replaced by the A321F: “Our cargo experience with Airbus has been that of an ‘easy’ transition. The A321 is a great product, showing fantastic reliability during the last 6 months. Hence, the aircraft can fly more. It burns 20% less fuel compared to our former B37-400SF. In a nutshell, we are really happy with the EFW product and will have 5 aircraft by next year.”
Quite a testimony and music to the ears of converter EFW.
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