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Leasing Firm To Convert 18 Airbus A321 Passenger Jets To Freighters

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Aircraft leasing company BBAM Limited Partnership on Monday placed the largest order to date for the new Airbus A321 converted freighter, which is attracting growing attention from express delivery companies and airlines supporting parcel networks that are experiencing rapid growth in e-commerce business.

The San Francisco-based leasing services provider said it signed a contract with Elbe Flugzeugwerke (EFW), a joint venture between original equipment manufacturer Airbus and Singapore's ST Engineering, to convert 18 of the narrowbody passenger jets into full freighters. The deal essentially locks up a full production line for BBAM through 2025 and comes with the option to add new conversion slots every year starting in 2026.

BBAM, which manages leases for investors that own aircraft, has already converted and redelivered two A321 converted freighters to Titan Airways, a U.K. charter airline, for a total of 20 orders so far.

BBAM spokesman Matt Dallas said two of the reconfigured freighters will be leased to Lufthansa Cargo. The Lufthansa cargo subsidiary last month said it plans to add two A321s to its all-cargo fleet and outsource the flying to regional passenger carrier Lufthansa Cityline, a sister company, but did not disclose where it was acquiring the aircraft. Lufthansa expects the freighters to enter service in early 2022.

The feedstock for conversions will come from BBAM's portfolio, which totals more than 500 aircraft.

Demand for all-cargo aircraft has never been more intense, with global cargo capacity down more than 12% from pre-pandemic levels and shipping volumes at near-record levels. Nearly every airworthy freighter has been put to use in the past 18 months, and more airlift will be slow to materialize because modifying aircraft takes several months each and conversion shops are booked up. Last week, Air Transport Services Group (NASDAQ: ATSG) said it placed deposits with engineering outfits to secure 67 conversion slots over the next 3 1/2 years for three different aircraft types.

BBAM is taking a diversified approach to investment in converted narrowbody freighters, with 31 orders and commitments so far with Boeing Co. (NYSE: BA) for converted 737-800 freighters. In July, the leasing company added a dozen aircraft to its original order.

"Our commitment to the P2F program demonstrates our confidence in the ability of EFW and ST Engineering to deliver long-term value enhancement for the A320s and A321s in our fleet," said BBAM President and CEO Steve Zissis in a statement. "We have committed to the A320/A321P2F program well into the future — beyond 2026 — because we see it as a greener and highly innovative solution for our airline customers, and an excellent way to drive value for our investors."

EFW said many of the conversions for BBAM will be carried out at ST Engineering's airframe facility in the U.S. The company previously said that ST Engineering will be adding an A321 conversion line at its VT Mobile Aerospace facility in Mobile, Alabama.

EFW was the first out of the blocks to introduce a design for modifying the A321 to carry cargo containers and pallets on the main deck. The first plane was delivered last October to Qantas to support Australia Post. Prior to the new BBAM order, EFW had logged about 17 orders from leasing companies for the A321 passenger-to-freighter conversion.

321 Precision Conversions, a U.S. joint venture between Portland, Oregon-based Precision Aircraft Solutions and ATSG, earlier this year delivered its first A321 converted freighter to a European customer and recently began retrofitting aircraft based on recent design approval from the Federal Aviation Administration.

Another competitor, Nanchang, China-based Sine Draco Aviation Development Ltd., is also preparing its first prototype of the A321 in all-cargo configuration.

Turning used planes into freighters is a complex undertaking that requires specialized repair shops to make structural changes, including cutting a large opening in the fuselage for a cargo door, stripping out seats, reinforcing the floor to support heavy loads, installing a rigid barrier to protect the cockpit from shifting freight and covering windows.

Although Boeing has a three- to four-year head start in the midsize freighter category for conversions, aviation experts say the A321 is likely to prove a worthy competitor because of a design that allows containers — not just breakbulk cargo — to be carried in the lower deck. The large payload, plus fuel efficiency and long-range, provide operators a high degree of operational flexibility. The A321 freighter has a payload of about 61,800 pounds and a range of more than 2,300 nautical miles.

It also is considered an excellent replacement candidate for aging Boeing 757 converted freighters.

RELATED NEWS:

BBAM goes bananas for Boeing 737-800 freighter

Aircraft leasing firm BBAM pursues dual freighter strategy

Lufthansa's CityLine passenger subsidiary to haul freight

ATSG ramps up to lease A321 converted freighters

Why the A321 converted freighter looks like a hot ticket

ATSG to invest in A330 passenger-to-freighter conversions

Image by JUNO KWON from Pixabay

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