The Boeing Co. (NYSE: BA) on Tuesday reported no new orders for commercial aircraft in January for the first time in 57 years, but did announce that aircraft leasing company BBAM has signed a contract to convert three of its Boeing 737-800 jetliners into freighters.
San Francisco-headquartered BBAM manages $27 billion in assets and has more than 200 airline customers around the world. It is extending the life of the 737-800s to capture a new opportunity in the growing e-commerce and express markets.
The 737-800 converted freighter has a payload of 52,800 pounds. Since entering into service in 2018, it has won 130 orders and commitments, according to Boeing.
Boeing previously announced plans to add a 737-800BCF production line at Guangzhou Aircraft Maintenance Engineering Company Ltd. in China this summer.
GAMECO is a joint venture between China Southern Airlines Co. Ltd. and Hutchison Whampoa (China) Ltd. from Hong Kong, which specializes in aircraft and airborne component maintenance, repair and overhaul.
Boeing's commercial market outlook envisions interest in 1,220 standard-body passenger-to-freighter conversions in the next 20 years. Airbus says there will be a need for about 1,000 small freighter conversions over the same period.
Boeing's lack of orders is mostly due to the ongoing grounding of the 737 MAX following two deadly crashes investigators blamed on the automated flight control system and inadequate pilot training in how to respond to the system override during takeoff.
Customers are waiting for global aviation authorities to certify the MAX for commercial flight after Boeing completes software and other corrections. Boeing delivered 10 planes to commercial customers last month.
The aerospace giant is losing billions of dollars in potential revenue and compensation expenses because of the grounding. It is also losing ground to European rival Airbus, which booked 274 net orders in January.
In related news, Singapore Technologies Engineering Ltd. and joint venture partner Elbe Flugzeugwerek (EFW), based in Dresden, Germany, this week announced the successful first test flight of their prototype Airbus A321 converted freighter (CF) and new orders for the aircraft.
The flight test was carried out Jan. 22 after the plane was converted at ST Engineering's facility in Singapore.
The plane, with a payload of 27.9 metric tons and a range of 2,300 nautical miles, is aimed at the express domestic and regional markets.
Vallair, an aircraft leasing and services company based in Luxembourg, is the launch customer for the A321 passenger-to-freighter conversion. Australia's Qantas last year signed a letter of intent to lease the first A321CF. It will be operated by Qantas Freight on behalf of Australia Post, adding 50% more capacity (9 tons) than its existing fleet. Vallair says it will deliver the plane this year.
The next milestone is obtaining the supplemental type certificate from the European Union Aviation Safety Agency, which is expected by the end of the first quarter, according to ST Engineering.
Under the A321CF program, ST Engineering is responsible for engineering development, including obtaining the supplemental type certificates from EASA and the U.S. Federal Aviation Administration. Airbus contributes with data and certification support, onboard computer development, airframe engineering and flight-physics and flight-testing expertise, while EFW will hold the certificate and handle marketing and sales.
Meanwhile, ST Engineering said its aircraft leasing joint venture signed a letter of intent with Qantas for an A321CF, with delivery scheduled for the end of 2021.
And BBAM has finalized orders for several A321 freighter conversions. Work is underway on one of the airframes and the second will come in for work in March.
"As the first conversion solution for narrowbody freighters to optimize volumetric capacity by introducing a containerized lower deck, the A321 passenger-to-freighter has the potential to be the game changer for any hub and spoke or point-to-point air cargo operation," BBAM CEO Steve Zissis said in a statement. "For this reason, we made the decision to offer this conversion solution to our customers."
It is the the first plane in its size category to offer containerized loading on both decks, with 14 container positions up top and 10 lower deck positions, according to EFW.
ST Engineering also said it landed a three-year contract from Alaska Airlines (NYSE: ALK) to do heavy airframe maintenance on the airline's fleet of Airbus A320 aircraft at the ST facility in San Antonio. It also secured a five-year contract from Qantas Airways to maintain engine housings, called nacelles.
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