A321P2F conversion demand set to grow

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Airbus A321-200 passenger to freighter (P2F) conversions will become much more common in the future, but the air cargo market potentially faces a narrowbody oversupply.

IBA reported in a webinar this week that the 737-800P2F has dominated the market since 2019, although this is set to change.

A321P2F conversions will be able to ramp up as passenger (PAX) feedstock becomes available, said IBA analyst Jonathan McDonald in the ‘IBA Insight: How are Freighter Values Performing?’ webinar this week.

He noted that the A321P2F was expensive initially because lease rates had to justify the initial investments, but as more feedstock becomes available and therefore more of the conversions enter the market, lease rates should come down.

Narrowbody oversupply

But he also warned that the market could see an oversupply of narrowbody freighters.

Cargo capacity demand during the pandemic drove conversion activity and although 2023 saw a slump in air cargo demand conversion activity continued, with narrowbody conversions dominating the market, found IBA.

There are currently 737-800 conversion programmes running by Boeing, AEI and IAI.

Reflecting on the sheer number of conversions, including the 79 737-800P2F conversions carried out last year, McDonald said that “there’s only so much demand for aircraft” so if conversions continue at the current rate this will “flood the market with too many aircraft”.

He added: “It needs monitoring. The reason for that is too many 737-800s being converted.

“At some point some reality has got to set in and it’s got to settle back down to the numbers we were seeing in 2021-22 and maybe even less.”

This year’s conversion market activity is expected to be “on a more normal level” compared to 2023, he said.

Air Cargo News has heard reports of newly converted 737-800 aircraft going straight into storage in the UK and even having engines removed for use on other aircraft due to an oversupply of narrowbody conversions in the market.

Buoyant demand in the passenger market has airlines scrambling for more capacity, a situation that is exacerbated with problems with Pratt & Whitney engines. In some cases engines have been pulled off parked 737-800Fs, suggesting they are valued higher than a full freighter, according to Bob Convey, senior sales and marketing at conversion firm Aeronuatical Engineers Inc.

Limited feedstock availability due to passenger market demand for aircraft is also predicted to constrain future conversion activity, according to the IBA webinar.

Meanwhile, conversions of 737-300SF and 737-400SF, plus the 757-200PCF have declined.

These are “in their twilight years now” and “expected to conclude soon” as limited aircraft remain, said McDonald.

EASA approves 321 Precision’s A321-200 freighter conversion

HAECO completes first A321-200PCF freighter conversion with 321 Precision Conversions

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Rebecca Jeffrey

Rebecca Jeffrey
New to aviation journalism, I joined Air Cargo News in late 2021 as deputy editor. I previously worked for Mercator Media’s six maritime sector magazines as a reporter, heading up news for Port Strategy. Prior to this, I was editor for Recruitment International (now TALiNT International). Contact me on: [email protected]