Assessing the wide-body and narrow-body freighters

This column has been updated since distribution to our e-mail recipients Sept. 22.

There is an emerging demand to replace aging small- and medium-size wide-body freighters, but with limited choices to replace them.

Airbus A310Fs and A300Fs are rapidly aging. Used principally by FedEx, UPS and DHL, these aircraft are in a size that is too small for the new-build Boeing 777F and Airbus A330-200F, and for which these airplanes are too costly to provide a good return on investment.

FedEx is replacing many of its aircraft with the new-build Boeing 767-300ERF, but it deferred and reduced its order for the 777F. UPS has no 767s on order from Boeing, having previously fulfilled its backlog.

The package carriers may down-gauge. FedEx contracted to acquire a large number of Boeing 757s for P2F conversion, but many of these have been replacing Boeing 727Fs. DHL is currently evaluating proposals for converting 757s from P2Fs from third-party conversion companies. The 767-300ER is the one airplane most comparable with the A310s and A300s.

FedEx, UPS and DHL may simply retire some of these aging Airbuses rather than replace them.

Cargo continues to shift to belly capacity of large passenger airplanes, further diminishing the prospect of the demand for medium- and large-freighters.

The decision by Air France-KLM to exit KLM’s all-cargo business, citing the shift to passenger airplane reliance as one reason, is further proof that the demand for expensive new-build freighters is in free fall.

There are just 18 Boeing 747-8Fs, 44 767-300ERFs and 39 777Fs in backlog at August 31. There are 11 A330-200Fs in backlog, also at August 31.

There has been only one 747-8F firm order booked this year, six in 2013 and only 13 since 2011.

FedEx is the sole customer for the 767-300ERFs in backlog; there have been no orders this year. FedEx ordered two in 2013, 19 in 2012 and 48 since 2011.

Four 777Fs were ordered this year, nine in 2013, none in 2012 and a total of 55 since 2011. Qatar Airways announced an order for four 777Fs at the Farnborough Air Show but these have not been booked yet.

Airbus has seen its A330F orders converted to A330Ps. There have been no A330F orders booked so far this year.

Boeing continues to claim a recovery in the cargo market in 2016-17 will support production of 2-3 747-8Fs and 777Fs per month, but industry experts in the cargo space remain skeptical.

Boeing has also been promoting 777P2F conversions for years, but this would depress sales of the new-build 777F. Furthermore, a 777 BCF suffers the same handicaps as a 767 BCF: high BCF pricing, limited feedstock and residual values that aren’t yet where they need to be. Additionally, floor beams in the 777 are composite, which were selected when the airplane was gaining weight in the design stage. Replacing these to beef up the floor adds to the cost and the design issues.

We expect a new entrant into the 767-300P2F conversions to emerge. Currently only Israel’s IAI is a third-party trader in this space. The Boeing Converted Freighter has been offered for years, but pricing of the BCF has been too high for the market. Feedstock and pricing has also been an impediment. However, with the Boeing 787 now entering service in large numbers, allowing customers who had to retain the 767 due to 787 program delays to release them, feedstock is increasing and with it residual values are declining. This will open the doors for third party vendors to emerge.

Single Aisle P2F Conversions

There continues to be strong demand for single-aisle P2F conversions. Boeing 737s nearly have the exclusive in this sector. Demand has largely been confined to the 737-400, with some 737-300s also being converted. Residual values and feedstock drive this. Some contracts for P2F conversions of the 737-800 are just beginning to emerge. A few McDonnell Douglas MD-80s are now being converted. Aeronautical Engineers Inc. is the leader in both programs.

An intriguing use of the MD-80F is carrying oil pipes that are too long to go through a cargo door. A conversion is possible whereby the tail cone opens to allow straight-in loading of oil pipes.

Airbus has been unable to create an economically feasible conversion for the A320/A321. Once again, feedstock and residual values are important inhibitors. But more challenging is where to put the cargo door.

The A320 Family’s fly-by-wire system runs right where the forward cargo door would be placed. Rerouting these systems, while technologically feasible, is costly and time consuming. Putting the cargo door aft of the wing in the A320 creates logistical loading issues; this position is more feasible in the A321, but stress issues arise for any aft-door configuration, according to one P2F company that’s looked at this.

Airbus and Russia’s Irkut entered into a joint venture many years ago to pursue an A320P2F program but the FBW technical and cost issues killed the program in 2011. Strong demand for used A320s in the passenger market was cited as the reason but we’re told the technical and cost issues were the real reason. Nonetheless, Airbus cargo affiliate EFW continues to pursue the prospect today, according to our Market Intelligence. The technological issues haven’t gone away. Whether increasing A320 feedstock will lower RVs to such an extent as to offset the expensive technological solutions remains to be seen whether Airbus can truly offer an economical P2F prospect remains to be seen.

We believe 737 P2Fs will continue to have an almost monopolistic market share. The MD-80 will conceivably be a niche conversion, replacing piston-era cargo airplanes in places like Alaska. The oil pipeline market opens a potential market as well. But we don’t’ truly think the A320/321 conversion is a near-term prospect.

Update, Sept. 29: A company called PacAvi last week announced an A320P2F program, joining with AerCap subsidiary AeroTurbine. Several years ago, AerCap–now the second largest lessor in the world after acquisition of International Lease Finance Corp. this year–attempted an A320P2F conversion program but abandoned it for the reasons listed above. PacAvi didn’t explain how it will overcome these issues. The specifications are here.

Our Market Intelligence suggests that EFW and ST Aerospace may soon announce a P2F program. This means the Airbus IP and licensing will be available to this group. PacAvi indicated that it does not believe it needs the IP, but can accomplish a P2F program on its own.

37 Comments on “Assessing the wide-body and narrow-body freighters

  1. “The 767-300ER is the one airplane most comparable with the A310s and A300s.”

    LD cantainers do not fit ina 767. A major issue because LD3 containers are the industry WB standard.

    The fleets of A300s, A310, DC10, MD10, MD11 to be replaced are considerable.

    I guess an A330F NEO could be available around 2018-19. Hundreds of existing A330 and 777 will become available, that doesn’t help new airframes.

    • Is the A330 NEO offered in a freighter version? If the passenger version of the NEO is due in 2018/2019, could Airbus REALLY churn out freighter versions, all the while the current version is not moving any units? I doubt it.

    • There are tens of thousands of LD3 containers used in cargo ops right now, since they are the standard for both the 767 and 757. I really don’t think the size of the container will be as important as the size of the aircraft.

      My money, (though not a lot of it), is on a 767MAX in the next couple of years, as more of the mid sized wide bodies retire, and I think the demand will come from cargo carriers.

      There is such a huge gap in new build aircraft between the 321/739 and 788/332 sizes, currently being filled by 300,310, 757, 767 models and only one of these is still in production, and will be for the next decade or so and that’s the 767.

      This has been an interest of mine for a while now; slap some GEnx -2B’s under the wings, add some scimitar winglets and do a few aero tweeks, (like hybrid laminar flow), and you’d get at least a 15% decrease in fuel burn, all with off the shelf parts.

      Standardize the engines at least with the Air Force version and economics of scale and production stability add even more benefit.

      There’s plenty of room under the wing of the -200/-300ER’s for the engines, the thrust is about the same and the GEnx’s are only a thousand or so pounds heavier than the stock engines….a percent or two of the OEW. The 767 already has a long tradition of using the same engines as the 747….and I suspect GE would like to get some of their development money back, especially with the tenuous future of the 748.

      At some point, somebody is going to ask for a smaller and cheaper plane than the 330/788, more capable than the 739/321 and nobody is planning another all new aircraft for another decade. There’s one plane that’s smack, dab in the middle in almost every area, including price; the 767.

      • Agree with everything you say, EXCEPT the first line. LD-3s are NOT standard on the 767 (wastes too much space), the LD-2 (and LD-4/LD-8) is the 767’s standard. And the thought of an LD-3 on a 757 fills me with horror. (LD = Lower deck). It doesn’t have a belly hold bigger than a few suitcases, so it would have to go on the main deck of a 757F – and be held down with straps! Definitely NOT a 757 standard ULD.
        [FYI the LD-3 is standard on the 747/777/787, DC-10, MD-11, L-1011, A300/310/330/ 340/350/380, all of which have 125″ wide lower hold floors.]

        • The 222″ A300 crosssection was the smallest diameter that could take 2 LD3 back to back, achieved by raising ( in relation to the established WB deck position ) the main floor. A rather efficient arrangement.

      • 767max would still have the inefficient 7-abreas cross section and would get killed in the marketplace by A330neo like the original 767 was killed by the A330.

        • The 767 isn’t in the same ball park as the 330, NEO or otherwise…at least not in the smaller sizes. The 330-200 is 70,000lbs heavier than the 763. What I’m proposing is a 767, 757, A300, A310 replacement. The 332 is competition for the 788.

          A 767MAX would haul 180-250 people 6,000 miles cheaper than anything else out there. It wouldn’t be a long range heavy lifter….it never was. It would fill the medium size, medium range gap that is growing with every middle sized retirement.

          Not everybody needs the lift, range or price tag of the 330 or 787.

        • A321 NEO kills any chance the 767 has of making a comeback. Pity, my favourite airliner.

      • Joe, You are aware that Air-force is a P&W engine and probably at least 10% less efficient than a GENx type?

        If there is going to be a MAX it has to have a new engine, not an a older less efficient one. If it happens it will be a GENx (though better yet would be a PW GTF varient.

  2. UPS was the launch customer for the B-767-300ERF, and B-757-200PF, back in the early 1990s.
    As for the UPS A-300-600F, they ordered about 90-95 new build airplanes in 1999 or 2000. UPS eventually took delivery of about 50 of them, the last 35-40 A-300Fs were converted to 10 A-380-800F. The A-380F became still born and Airbus was forced to cancel the UPS order for them (and by extension the remaining A-300Fs), and returned UPS’s deposits.
    UPS, who could have reordered the A-300-600F, but did not. Instead, UPS ordered 27 additional new build B-767-300ERFs, bringing the total B-767F fleet to about 60 aircraft. UPS took delivery of their last B-767F in 2013.
    UPS replaced their order of 10 X A-380Fs with 8 new build B-747-400Fs, taking some of the last B-744s built.
    FedEx is also buying new build B-767-300ERFs.

    • The last B767 were sold rather cheap to keep the FAL running until arrive of the KC-46. Production for A300 did end in 2007.

      At the moment FedEx operates 71 A300 and 6 B767. FedEx has 46 B767 on order.

      It will be more interesting how UPS is going to replace the aging MD-11 fleet? FedEx also has a huge fleet of MD-10/11. Cheap 777noX?

      • Airbus used to have ideas for these, but that seems history. Now China makes a better chance.

      • Right now the only airplane that can match the (pure) MD-11F capacity is the B-777-200LRF. Some DC/MD-10CFs can be replaced by B-767-300ERFs, all of the FedEx DC/MD-10CFs, both the -10 and the -30, are converted freighters and former pax jets. The MD-11CFs (former pax jets converted to freighters) are less capable than the pure built MD-11Fs. These could be replaced by new build A-330-200Fs, B-767-300ERFs, or converted B-777-200ER-BCFs.
        Airbus is left behind in the converted freighter market because the A-320series, A-330, A-340, and A-380 are not economically convertible into freighters. Boeing may also suffer from the B-777BCF program as it is to expensive, as Scott already mentioned. There is a glut of B-744s and B-762/3s now available for conversion, but they are not moving many airframes to conversion, either.
        NB conversions to freighters was also covered by Scott, the B-737 and B-757 both being the most practical airframes for conversion. There are still some B-727F/CFs and DC-8-61/-63CFs in the deserts. I’m not sure if any B-707C/CFs are in storage available for conversion. But, these can all be had rather quickly if someone wanted them, despite their gas mileage costs.
        New and Converted freighters are available, it is just no body needs them right now.

        • You hit the nail on the head with the last sentence. Pax volumes increase 5%PA and freight 1%, or less than 1%. More belly space goes unused every year. I don’t think anybody sees an end to this trend. I wonder how long before the parcel carriers start contracting more with airlines for belly space where possible?

        • Do you have anything to support your common statement:
          “Airbus is left behind in the converted freighter market because the A-320series, A-330, A-340, and A-380 are not economically convertible into freighters.”
          The A320 P2F is mentioned above. P2F conversions of valuable aircraft like A330 and A380 are unlikely.

          What about A340 P2F?

        • Just a minute… Ref your first paragraph, 2nd & 3rd sentences:
          CFs are convertible freighters (e.g. pax in the summer, freighters in the winter), NOT converted pax aircraft. The latter are/were designated (F)s or SFs (“special freighters”) or nowadays BCFs by Boeing (Boeing Converted Freighters).
          And the MD11SFs/BCFs are no less capable than the OEM MD-11Fs (with just a few exceptions). In fact many BCFs have greater MTOW than some Fs.
          [And not all of the FedEx DC-/MD-10Fs are conversions. Eight were OEM-built as CFs, i.e. with main deck cargo doors.]

  3. I think the 767 takes LD2’s. As for UPS, they don’t use LD3’s, and A300 and 767 have an identical full width bellycan set up. The A300-600 has the capacity to carry 22 containers on its upper deck and seven containers in the lower cargo holds. UPS’ A306 has a max structural payload of 109,600 lbs and a range of 2,500 nautical miles.

    The 767-300 ERF has the capacity to carry 24 containers on its upper deck and 7 in the lower cargo holds. UPS’ 767’s have a maximum structural payload of 127,330 lbs and a range of 3,270 nautical miles.

  4. Two items:
    Any converted aircraft needs new floor beams, not just the B777. Whether it is composite or metal, the loads for a passenger aircraft are much lower. Today’s aircraft are more efficient than the DC-8 (thankfully), but trade other characteristics. For example, they don’t fetch around the added weight or an over-engineered fuselage structure.
    The A320P2F: fly-by-wire is rather easy to re-route, much easier than any other type of cable. Can’t believe that this “killed” the program. The combination of cost (both recurring (conversion) and the non-recurring, rather sluggish demand (if people are happy with B727Fs, they rather opt for cheap aircraft burning plenty of fuel) and rather high prices for used A320s killed it.
    If there was such a high demand, we should see a lot B737-700 going P2F (essentially same fuselage as -300).

    • From comments I saw from Airbus, the impression I got was that there was insufficient length in the forward fuselage between the first door and the wing. The A321, being a longer aircraft, is OK. Of course the 737 manages it, but there was also a hint from Airbus that newer certification standards were against them, so perhaps the 737 benefits from grandfather rights on an older, less stringent certification. This is all speculation on my part.

    • Okay, but what does that have to do with freighters? The A-350-900F is years away, if it ever gets built, and even longer before any A-350 is converted into a freighter, if that is possible.

      • I guess the answer is related to the five bellies in the picture above. The A350-900 can carry 36+1 LD3s or 11 pallets. The A350-900(F) is very close to certification. The 787-9(F) can carry about the same amount of container and pallets.

        • The (F) was a joke about the waste belly capacity of any single deck passenger aircraft for luggage. Just the A380 has now superfluous belly capacity.

          Luggage can be stacked far better in the lower part of a barrel than pax on the upper side. Well, Mr. O’Leary tries hard to change that …

        • Really on the excess belly on an A380? The first complaints you heard were that they A380 could barely carry pax luggage with no excess space left.

  5. Evertts has picked up at least two DC9-30F (I believe that is correct) to start replacing the DC-6

    NAC is flying the old retired AK Airlines 737 freighters.

      • Scott,

        The Everts site says DC-9, I did some looking and it seemed like they had picked up the cargo DC-9-30Fs.

        Doing an in depth it looks more like a DC-9-50 from the length, I assumed they bought them as an 30- F as I heard of no conversions but maybe someone did some -50s.

        High engine so better on the rough strips though I don’t know if they go into any gravel.

        Their web site says one, but they have two for sure.

        At one time they had information that the DC-6 was going to be retired due to lack of parts but I don’t find that anymore.

        • Everts has FOUR DC-9-30Fs (all with large cargo doors): MSN 47040/N904CE, 47363/N930CE,47413/N935CE, & 47465/N932CE. They were all in service during the last half of 2013, and as far as I know they still are. They also acquired a DC-9-41PC pax door freighter (ex-ABX), 47615/N952AX, but I don’t know if it’s in service.
          There were no DC-9-50 cargo conversions (or pax door freighters), but Airborne/ABX had 29 DC-9-41 converted to PCs.
          All this and much more can be found at !

        • I sure have not seen what should be an obvious MD of any kind in Anchorage, maybe Fairbanks? New stealth coating? Sheese

          What I see coming and going are the two that look like the DC-9-41 (and did not know there were any cargo variants. hmm>

          And Website is way out of date, but then……

          • The one and only Everts DC-9-41 (N952AX) is a pax door freighter. There are no -40 series with large cargo doors. There are no -50 series freighters of any kind. The one existing Everts MD-82SF is N73444. The next one, an MD-83 (due out of conversion Feb 2015) is N965AS.
            [The DC-9-41 is 110ft 7in long, the MD-82/-83 is 147ft 10in (and the DC-9-51 is 118ft 7in.]

        • And the lengths on the website is closes to a DC-9-50, so for whatever it is or isn’t worht.

  6. Checking a tail numer at ANC finds that this one is a DC-9-30F (N930CE)

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