Israel Aerospace Industries said on Monday it will set up additional production capacity in South Korea for its first-of-a-kind conversion of used Boeing 777 aircraft into all-cargo jets.
The Tel Aviv-based aerospace and defense company signed an agreement with Sharp Technics K and Incheon International Airport Corp. to establish a facility for passenger-to-freighter conversion of 777-300 aircraft. IAI said Sharp Technics will begin rebuilding aircraft for dedicated cargo applications in 2024.
IAI hasn’t officially presented information on how many orders it has for the converted freighters, but the opening of another remote production line indicates that demand for the large freighter is strong.
The company, which is partnering in the development with leasing giant AerCap (NYSE: AER), is in the final stage of licensing approval and says it expects to receive certification for its design later this year. Last month, it successfully completed the first flight test for its modified Boeing 777-300.
Co-investor AerCap is supplying IAI with 777s from its portfolio that have reached their useful life as passenger aircraft. CEO Aengus Kelly said during a March 3 earnings call with analysts that the lessor has customer commitments for 18 of 20 production slots it reserved with IAI. Some airlines are also placing conversion orders directly with IAI.
The prototype aircraft will go to U.S. carrier Kalitta Air, which has also signed leases for two additional 777-300 converted freighters. Emirates has committed to convert four of its own 777 passenger jets, with Cargo Facts reporting last year that the airline has decided to retrofit six more airliners. Other airlines that have reserved IAI conversion slots include, Hong Kong startup Fly Meta, Israel-based cargo airline Challenge Group and EVA Air. Available information suggests IAI could have more than 30 total orders to date.
Canadian all-cargo carrier Cargojet recently changed its mind about four conversions with IAI, saying last month it will sell two planes it acquired for a cargo changeover and indefinitely postpone work on two other aircraft to better maintain cash flow amid growing economic uncertainty.
IAI is outsourcing conversion of the Emirates aircraft to Emirates’ own airframe maintenance facility in Dubai.
The redesigned jets are dubbed the “Big Twin” because of the 777’s size and two GE-90 engines. Kelly attributed the “very, very strong uptake” to the 777-300’s large carrying capacity and wide fuselage that make it well suited for e-commerce shipments where payload weight isn’t important as space on the aircraft. The 777-300 Extended range aftermarket freighter has 14% more volume and 10 tons more payload than a 747-400 and is 21% more fuel efficient, according to IAI. It is ideal for lightweight freight that takes up space because it has more interior volume but a similar weight payload compared to its sister.
Kelly said the first 777s will be delivered this year.
IAI’s timetable appears to have slipped a bit, which is not unusual for new aircraft development projects. Officials last year said they expected to have their design certified and be producing planes in the first half of 2023. The first test flight test was originally planned for the end of 2022. Some of the delays are likely on the regulatory front as U.S. and Israeli aviation authorities cope with a shortage of manpower and high workloads.
Many types of aircraft are converted to cargo configuration after finishing useful life as passenger jets. The complex engineering process involves stripping an aircraft to the bones and installing reinforced flooring, rugged interior walls, a wide cargo door and other features to enable transport of large containers on the main deck.
IAI, which has experience converting Boeing 737 Classics and 737-800s, 767s and 747 jumbo jets, aims to bring the first 777 converted freighter to market. U.S.-based startup Mammoth Freighters also has programs to convert 777-200s and 777-300s and says it hopes to have one modification certified by the Federal Aviation Administration in the first quarter of 2024.
Click here for more FreightWaves and American Shipper articles by Eric Kulisch.
Contact Reporter: ekulisch@freightwaves.com / Twitter: @ericreports; LinkedIn: Eric Kulisch; ekulisch@freightwaves.com
RECOMMENDED READING:
