Aug. 8, 2023, © Leeham News: The cargo conversion market faces the prospect of oversupply of certain types, the consulting firm IBA said last week in a webcast.
The aftermarket conversion of Boeing 737-800s is already at 60 this year, according to IBA’s estimate.
The forecast doesn’t extend beyond this year—and therefore is incomplete. IBA notes that the Airbus A321 P2F supply is a fraction of the 737-800 conversions, which are undertaken mainly by Boeing and aeronautical Engineers Inc (AEI). There are more than 100 A320 family conversions orders (all but a handful for the A321) that will be coming on line in future years.
Likewise, IBA’s forecast for widebody conversions doesn’t extend beyond this year. There are also more than 100 orders for Airbus A330ceo conversions (all but a handful for the A330-300). Figure 2, like Figure 1, paints an incomplete picture.
CargoFacts Consulting’s 20 year forecast shows how the Airbus models, coming from a low base, are on a trajectory to capture 47% of the P2F market. The Boeing 757 P2F model is nearing the end of its conversion life as feedstock dies up.
A330 conversions are on track to overtake the 767, which still has a solid future in conversions. New 767 aircraft production must cease by the end of 2027 under noise and emissions standards that become effective then. Boeing hopes to exempt the 767 from the standards, but it’s too soon to say if this effort will succeed. CargoFacts also assumes Boeing will proceed with a freighter version of the 787. A P2F of the 787-8 and a new production model of the 787-9 are under consideration.
The consultancy sees a 20 year market for the new freighter entrant from Airbus, the A350F.
CargoFacts sees a long life and good demand for the Boeing 777F. This includes the remaining new-build 777-200LRFs (production must end in 2027 per the emissions standards), conversions and the new 777-8F.
Boeing is becoming more confident in the 777X program’s backlog, which includes more than 50 777-8Fs. Under an accounting rule called ASC 606. Boeing must classify orders that are iffy (usually for concerns whether the customer will take delivery). At the end of last year, 110 777Xs and 17 777 Classics were identified under ASC 606. In the June 30 10Q quarterly filing with the Securities and Exchange Commission, only 45 X and 14 Classic orders were categorized under ASDC 606.
Boeing drastically improved the 777X orderbook quality situation.
Boeing doesn’t publicly identify the customers under ASC 606. LNA believes these are the Classic customers:
For the 777X, the ASC 606 customers are probably 25 for Etihad, 10 Unidentified, and another 10 that are harder to identify.