Conversions: A viable solution?
The phalanx of freighters is expanding, courtesy of the arrival of a new type at the small end of the spectrum. Conversion firm Aeronautical Engineers Inc. aims to have its first MD-80 freighter on the market before the end of the month, following the converted plane’s maiden voyage in late September. Even so, Bob Convey, AEI’s vice president of sales and marketing, admits, “It is coming a little bit later than we wanted.”
The new kid on the block can lift 21.3 tonnes, with room to take 12 88-inch-by-108-inch pallets, eight 88-inch-by-125-inch pallets or eight 96-inch-by-125-inch units. This capability comes at a sticker price below $3.5 million, owing largely to the low residual value of MD-80 conversion candidates. MD-80’s exiting passenger service can be picked up for less than $1 million, while the conversion comes at about $2.5 million. This adds up to less than half the price of a converted B737-400 freighter, which has roughly the same payload capability.
The first batch of MD-80 freighters goes to Alaska-based Everts Air Cargo, followed by another U.S. client. For subsequent deliveries, AEI has contracts with clients from Central Europe, Central America, the Middle East and Africa. One interested party from Australia is looking at the aircraft to support a mining operation, Convey reveals.
He says AEI has fielded requests from all over the world, something that has surprised him. “I thought it would be more in the developing world,” Convey says. Russia and Brazil are unlikely to see MD-80 freighters soon, though, as the aircraft type never got certified in these countries for passenger operations, he explains.
The cross section of the MD-80 differs from that of the 737, which raises questions about transfers between the two types. But Convey says it doesn’t matter much at this low price tag. Still, he reveals that some prospective customers have said they would interline with wide-bodies.
The plane’s higher fuel consumption isn’t likely to have much of an impact on its appeal, he reckons. For one thing, the MD-80’s lower acquisition cost gives operators leeway to spend a little more on fuel. Moreover, Convey estimates that utilization will be around two to four hours a day. “If it were 12 hours a day, it would be a different story,” he says. So far, AEI has netted 15 firm orders for the MD-80SFs, which should keep its conversion lines busy for some time.
Turning an MD-80 into an all-cargo configuration takes 60 to 70 days, Convey says, describing it as a sturdy plane that converts relatively easily. With many MD-80s still in passenger service, he expects no bottlenecks in feedstock for years to come. “A bigger problem will be slot availability,” he says.
Originally, AEI wasn’t planning to extend the conversion program to the MD-90, but management has since decided to convert this model as well. “The MD-90 freighter will have one more position, and it has greater range. I think it will do well in Europe,” Convey says.
The tally of MD-80 orders so far puts the new freighter level with AEI’s backlog of 737-400 conversions. With 11 pallet positions, the -400 has emerged as the dominant conversion candidate in the 737 family, and demand has been robust this year. “We are looking at buying another facility,” Convey says. AEI expects to perform 13 737 conversions in the coming year.
The lively activity in the narrow-body segment is in stark contrast to the current state of conversion projects for large wide-body aircraft. “We see a slowdown in conversions done by Boeing and others,” notes Chris Damianos, executive vice president, specialty markets and head of cargo programs and regional jets, GE Commercial Aviation Services. “We don’t have anything in conversion right now and nothing committed to conversion.”