Aeronautical Engineers (AEI) had a “mild year“ in 2015 but expects 2016 to be its best ever, according to the firm’s senior vice president for sales and marketing, Robert Convey.
He explains to Air Cargo Week that last year was steady in comparison to 2013 and 2014 for the passenger to freighter (P2F) conversion company, as only 20 conversions were delivered. “The primary driver for this was a lack of Boeing 737-400 feedstock as demand held steady,” he says.
Convey notes there were new trends emerging in the P2F conversion market during 2015. “There was a new interest in the Boeing 737-800 P2F programmes in 2015 as the 737-400 feedstock began to dry up. This strong demand is unusual because the supplemental type certificate (STC) will not be available until early 2018.”
AEI runs various P2F conversion programmes and Convey says the Boeing 737-200SF is now classified as complete, while the 737-300SF is slowing and it should see the last conversions being completed in 2016.
He explains the 737-400SF programme is still running strong and is forecasting 20-plus per year for the next three years. As for the MDN80SF, he says it is slow with only two or three conversions a year, while the CRJ200SF is nearing certification and currently has 40 orders. The 737-800SF is a work in progress with the prototype aircraft arriving in June this year.
In October, AEI received an order from Aviation Capital Group of 15 aircraft with options for an additional 15 freighters for its 737-800SF conversion.
AEI says it will commence the conformity of the 737-800SF modification in 2016 and expects to receive Federal Aviation Administration STC in 2017. To date, AEI has 50 potential orders for 737-800SFs.
As for overall demand, Convey says: “The 737-400SF has seen 20+ conversions per year for the past three years and is forecasted to see 20+ until 2018.” This he says has come from integrators such as DHL, UPS and FedEx, who are driving demand for the 734’s weather direct or through a third party. The strongest regions are Europe, the US and South America.
As for the future he adds: “We have a backlog of 28 conversions in 2016 and could book another 10 orders making 2016 AEI’s best year ever. Other than the 738 the Airbus A320 and A321 are the only aircraft in an age profile that would make P2F likely.”
There are challenges, Convey notes: “The biggest challenge for AEI and our customers remain available feedstock. The 738 will ease the pressure but the cost of the 738 is much higher than the 734 and will not be available to all customers.”