What is the freight expectation?

While the “voices of doom” in the aerospace industry are predicting stormy weather ahead for P2F conversions, notably B737-800 programmes, those converting airframes are not just getting on with the work – their numbers are expanding.

It came as no surprise when Joramco, the engineering arm of Dubai Aerospace Enterprise (DAE), became Boeing’s newest 737 conversion centre under an agreement signed in August. Boeing clearly believes in the viability of the Boeing converted freighter (BCF) programme and adding to its strengths, the location of Amman-based Joramco at the crossroads of Asia, Europe, and Africa makes it a key partner.

Despite warnings from global consultants IBA suggesting potential overheating in the conversion market, specifically the 737-800BCF segment, Boeing remains bullish.

The Seattle airframer predicts growth of 65 per cent in the global freighter fleet, to more than 3,700 aircraft in 2042. It said this expansion will need about 1,300 P2F conversions such as the 737-800BCF.

In the Middle-East and Africa, the all-freighter market is expected to register a compound annual growth rate (CAGR) of more than four per cent up to 2028.

Jeff Wilkinson, chief executive of DAE Engineering, said the group had a longstanding interest in the cargo conversion market, ever since the acquisition of Joramco in 2016. A key factor behind this move was northern hemisphere MRO seasonality and strategies to keep Joramco’s Amman hangars full year-round. Entering the P2F conversion business alongside providing widebody maintenance services for southern hemisphere operators, global flag-carriers, and cargo customers was a clear and strategic choice for Joramco.

After extensive talks with both major OEMs, Joramco announced the deal with Boeing and started preparatory work on the site of a new wide body maintenance hangar at Queen Alia International Airport. Wilkinson said: “Joramco is currently working with Boeing on the project readiness and if all goes to plan, we will be ready by Q3 of 2024 with end-of-year 2024 rollout,” Wilkinson said.

Wilkinson believes that there is a room of growth in the converted freighter market. Factors include the growing proportion of aircraft in the current cargo fleet approaching 30 years of age, the number of narrowbody conversions delivered to date, and the growth in e-commerce.

He told Arabian Aerospace: “I strongly predict that the 737 [P2F] market will be very successful for Boeing and Joramco. We are actively seeking potential partners, with a particular focus on other lessors who are the primary customers for BCFs within the industry.”

Bahrain-based cargo airline Texel Air appears to agree. Introducing the 737-800BCF to its fleet in 2022 brought new markets into play. Chief operating officer Patrick Fennell was quoted at the time as saying: “It puts Central Asia, Africa, Indian subcontinent and the edges of Europe within our reach. It has great operating economics, and is tried and tested in the passenger space.”

“Feedstock remains the biggest challenge to the project,” said Wilkinson. Expectations that the uptake of the 737MAX had been expected to leave behind large numbers of 737NGs at the age and valuations that make freight conversions attractive. However, ongoing uncertainties surrounding the MAX have impacted deliveries, with the result that operators and lessors are reluctant to leave themselves exposed by earmarking active passenger aircraft for conversion.

As for any potential B757 and B767 P2F projects, Joramco has no interest in that direction; for one thing, it does not have these types in its portfolio.

However, should Boeing announce plans for a 777BCF – a market Joramco has been closely monitoring – Wilkinson said: “I guarantee we would be knocking on the door asking for partnership as I truly believe a 777BCF would be an absolutely dream product for the customers who already own the ageing airframes. For Joramco as a leading MRO, we would love to be involved.”