IAI secures 29 freighter conversion orders

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Israel Aerospace Industries (IAI) has secured nearly 30 new orders for cargo conversion products, prompting its MRO unit Bedek to spool up its conversion operation after a slow two years.

IAI VP and general manager of marketing Jack Gaber told the 20 October Cargo Facts 2010 Aircraft Symposium in Miami that IAI has secured 29 new cargo conversion orders so far this year. He says this includes 14 767-200/300, 10 737-300/400 and five 747-400 conversions.

Speaking to ATI and Flightglobal after his presentation, Gaber says the 767 orders consist of 10 orders for the 767-300 Bedek Special Freighter (BDSF) and four for the 767-200BDSF. He declines to disclose the customers but industry sources attending Cargo Facts believe all the 767 orders were placed by the Air Transport Services Group (ATSG) and consist of a mix of passenger-to-freighter (P2F) and package freighter-to-freighter (PF2F) conversions. Sources also believe the 10-aircraft deal only consists of three firm aircraft plus seven options.

ATI reported in June that ATSG subsidiary Cargo Aircraft Management had completed the purchase of three 767-300ERs from Qantas and was planning to arrange for their conversion into freighters for re-delivery in the first half of 2011. ATSG, which owns three US cargo carriers including ABX Air, has had a longstanding relationship with IAI, which over the last two years has included converting 767-200PFs to 767-200BDSFs. According to Flightglobal's ACAS database, ABX Air currently operates three 767-200BDSFs, 15 767-200Fs and 14 767-200PFs.

Gaber says the two 747-400BDSF orders includes one order for three aircraft from an undisclosed Asian airline and one order for two aircraft from an undisclosed smaller customer. He says DVB aircraft are not included in this five. IAI is currently in the process of converting two 747-400s for the German bank's aviation asset management division, using conversion slots DVB had purchased a few years ago but had deferred.

Gaber confirms all 10 of the 737-300/400BDSF orders are from GECAS. ATI reported earlier this week that GECAS had placed orders with IAI for nine additional 737-400 and two additional 737-300 conversions. Gaber says only 10 of these orders were actually placed this year as one of the orders was placed as part of an earlier deal.

Gaber says all 29 BDSF orders secured this year involve conversions which will be done in 2010 or 2011. "Our lines are filling up fairly quickly," he says.

Gaber now expects IAI to convert seven 747-400s in 2011. IAI already has capacity to convert seven 747-400s annually but during the economic downturn, which resulted in several 747-400BDSF cancellations and deferrals, it has operated well short of full capacity. IAI only converted two 747-400s in 2009 and Gaber says IAI will only convert four 747-400s this year.

Gaber says 767 conversions have remained the most active of Bedek's cargo conversion products during the downturn. IAI now only converts 767s in Israel, where it has four lines dedicated to 767 conversions, but Gaber says the firm is considering adding a line outside Israel next year to meet surging demand.

IAI already uses Guangzhou Aircraft Maintenance Engineering (GAMECO) for most of its 737 conversions. IAI previously had a 737 conversion line in South Africa and a 767 line in Brazil but the downturn prompted it to consolidate its operation.