AEI to convert several 737-400s for Russian carriers

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Aeronautical Engineers (AEI) is planning to convert several Boeing 737-400s for new Russian customers this year, using recently secured certification from the Commonwealth of Independent States (CIS).

AEI announced earlier this week its 737-300SF and 737-400SF products have been approved by the Interstate Aviation Committee (IAC) of the CIS. AEI VP sales and marketing Robert Convey tells ATI and Flightglobal the US firm has already forged a contract with an undisclosed Russian operator to convert six 737-400s.

Convey says AEI is also now in negotiations with another Russian carrier that is looking to convert five 737-400s. All 11 737-400s are expected to be converted this year.

The first firm contract involves aircraft which will be sourced from leasing companies and will be imported into Russia after their conversion. These 737-400SFs are intended to be used to replace Antonov An-12s freighters currently operated by the customer.

The potential second contract involves aircraft being sourced from the customer. Convey says this customer is currently operating 737-400 passenger aircraft and is looking at converting some of them and establishing an all-cargo operation.

Convey expects the first two aircraft for the first Russian customer will be converted over the next few months at AEI sister company Commercial Jet. Convey says the remaining four 737-400s are expected to be converted this summer and could be worked on at AEI's new Chinese conversion centre.

AEI last year appointed Boeing Shanghai Aviation Services and Flightstar Aircraft Services as its second and third conversion centres. AEI also expects to appoint within the next few months a Brazilian maintenance shop as its fourth conversion centre.

Boeing Shanghai was earlier planning to begin converting its first 737 for AEI in early 2011 but Convey says this has been delayed until summer 2011. He says it is not yet decided if the first Boeing Shanghai aircraft will be for the new Russian customer or another customer.

While Miami-based Commercial Jet will convert several Russian-bound aircraft this year, Convey expects Boeing Shanghai will be the "primary" conversion centre for the Russian market over the medium to long-term. He points out that Boeing Shanghai already has MRO relationships with several Russian carriers and its shop is certified by Russian authorities. China is also geographically closer to Russia than the US, minimising aircraft ferry costs.

Convey says Jacksonville, Florida-based Flightstar is seen more as an "overflow" centre that will be used when Commercial Jet is at capacity. Convey expects Commercial Jet will become particularly busy after AEI's new Boeing MD-80 passenger-to-freighter product is certified late this year, resulting in more work for Flightstar in 2012. Flightstar is currently working on its first 737 for AEI - a 737-400 owned by Aviation Capital Group (ACG) that will be operated by Brazil's VarigLog.

Certification from the CIS for AEI's 737-300/400SF follows certification from the US FAA, EASA, China's CAAC and Brazil's ANAC. AEI says it is the first time a Western aircraft conversion product has been certified by the CIS's IAC, allowing leasing companies and CIS airlines to import and operate for the first time 737 converted freighters.

"I think the Russian market is going to explode and we're the only ones able to put freighters in there," Convey says.

He expects AEI will be the exclusive Western freighter conversion supplier in Russia and the CIS for at least two years given the approval process with the IAC is "very complex", political and expensive. Convey says it took AEI almost nine months to secure CIS certification. In October, AEI hosted 12 Russian engineers for two weeks, who did an extensive review of AEI's engineering data on its 737-300/400SF products.

"It was as heavy a review as the FAA or close to it," Convey says, pointing out that the process of securing Brazilian and Chinese certification was not nearly as tedious.

Convey sees the Russian narrowbody freighter market as mostly a replacement market for An-12s. He says there are more than 100 An-12 freighters still flying in Russia and these cannot be easily replaced by Russian-built aircraft because there are currently no similarly-sized Russian products available.