IAI aims to launch new cargo conversion product in 2011

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Israel Aerospace Industries is looking at launching a new cargo conversion product in 2011 as interest in conversions begins to pick up after a slow 2009.

IAI senior director of marketing and business development Adam Rosen says a new product could be added in 2011. He indicates that it is likely to be a widebody programme as conversions for the Boeing MD-80, 757, 737NG and Airbus A320 are not being considered.

"We're considering all kinds of options, but there probably won't be a decision this year," Rosen says. "The 777 will make a good converted freighter. Everyone knows it."

IAI's Bedek division currently converts Boeing 737-300/400s, 767-200/300s and 747-400s. The company is optimistic there will be demand for a new Bedek special freighter (BDSF) product as the cargo conversion market is starting to show some early signs of recovery.

"I think leasing companies see demand picking up, so they are wanting to convert aircraft," Rosen says.

But he adds that the 747-400 market remains slow. Bedek expects to complete only three or four 747-400 conversions this year and Rosen warns it will be hard to maintain a steady 747 conversion line unless lease rates and the purchase price of used 747-400 production freighters increase.

"As long as there's supply of cheap [production freighter] aircraft it's not economical to invest in conversions."

To meet strong demand for 767 conversions Rosen says Bedek is operating two lines for the 767-200BDSF and one for its new 767-300BDSF.

The company delivered the first 767-300BDSF last year and has since handed over a second, with work under way on a third aircraft. Bedek's 767-300BDSF programme is a joint venture with Japan's Mitui, a business model Rosen says IAI plans to also pursue for future cargo conversion projects.

IAI also now has two active 737-300/400 conversion lines at Chinese partner GAMECO. Rosen says of the 11 737 conversions IAI has on backlog only "a couple" will be done in Israel as it is more economical to convert the aircraft in China.

Rosen says the values of 737NGs are still too high to consider developing conversion products for the 737-700/800. While no one has unveiled plans yet for a 737NG conversion, Airbus has launched a passenger-to-freighter conversion for the A320. But Rosen says IAI is not interested in launching a rival Airbus single-aisle conversion.