Do not wait for an MD-90 freighter

11 / 02 / 2015

A combination of low demand and tight feedstock have doomed plans for a freighter conversion programme of the MD-90, writes Ian Putzger.

Bob Convey, vice president of sales and marketing at aircraft conversion specialist Aeronautical Engineers Inc (AEI) has confirmed that the MD-90 conversion programme is no longer a going concern.“We decided to abandon the programme,” he told Air Cargo News.

AEI has focused mostly on B737-400 conversions and was the first to launch a programme to turn 737-800s into all-cargo aircraft. It is the sole conversion outfit that turns out MD-80 freighters and was looking to add MD-90s to that programme.

Convey was the architect of that undertaking, having noticed that MD-80s could be purchased for less than $1m. With $2.5m for the conversion, this promised a 12-pallet narrowbody freighter at half the cost of a 737-400SF.

The MD-80 variants included in AEI’s conversion certificate promise a payload of 21.1 tonnes and the ability to take 12 pallets measuring 88 x 108 inches.

Seeing the aircraft as a good replacement for the B727 freighter, with a wide range of possible markets to cover, Convey was bullish about the MD-80SF, anticipating over 100 conversions over ten years. However the uptake has been sluggish, despite lively interest early on.

AEI has converted six MD-80s so far, and three are on the books for this year. Convey admitted that demand turned out to be disappointing, which he attributed to two factors.

The cross section of the MD-80 does not fit with the narrowbody freighter types used by the integrators, severely limiting the market for the freighter. Moreover, residual values of 737-400s came down faster than expected, narrowing the gap with the MD-80SF, which burns 12 per cent more fuel.

“There was great interest initially, when the 737-400 was going for five or six million dollars. It dried up when that went down to between two and three million dollars,” he said, adding that demand for 737-400SFs turned out stronger than expected, which made up for the shortfall in MD-80 orders.

The MD-90, the largest member of the MD-80 family, would have one more pallet position. AEI was looking to start converting this type in 2016/2017 – when 737-400 conversions were projected to taper off and AEI shifts to CRJ conversions before 737-800s start rolling off the conversion lines in 2018. 

However, its cross section renders the MD-90 unattractive for the integrators, reducing the potential market significantly.

There have been suggestions that interest in the MD-80SF soured partly because of trim and balance issues that reduced its payload, but Convey said the main reason for the decision not to proceed with the 13-pallet freighter programme was limited feedstock.

Fewer than 100 are in existence today, most of them still active in Delta’s fleet, which has given no sign of wanting to replace them any time soon, he said.

At the same time, demand has not exactly been overwhelming. “There was some interest, but not a lot,” he said.

The end of the MD-90 programme means that operators looking for a larger narrowbody freighter than the 737-400 and the MD-80SF will have to wait for the 737-800, which is expected to be ready by late 2017, although high residual values will limit the available feedstock for some time.Some players had set their sights on the 737NG freighter all along.

Chris Damianos, executive vice president of GE Capital Aviation Services and head of cargo programmes, said he prefers to wait for the 737NG.

Now others will not even have a choice. 

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