US cargo carrier Southern Air has unveiled plans to start replacing its fleet of 14 747-200/300s with 747-400 converted freighters, with the first of the new type to be placed into service in the middle of this year.
Southern Air CEO Daniel McHugh tells ATI and Flightglobal the carrier has committed to leasing five 747-400SFs, with two to be delivered this year and three next year. He says the carrier is also currently looking at a potential third aircraft for 2011 and fourth aircraft for 2012 as part of the first phase of Southern's new 747-200/300 fleet renewal programme.
He explains "the firm fleet plan" envisions the first 747-400SF being delivered in mid 2011 and the second being delivered in the fourth quarter of 2011. The other three firm 747-400s in the current fleet plan will be delivered throughout 2012.
McHugh says Southern aims to replace most of its 747 Classic freighters over the next three years with 747-400s. The carrier also operates two Boeing 777Fs with four more on order, but these are seen as growth rather than replacement aircraft.
"By the end of 2013 we should primarily be a 747-400 and 777 operator but we'll still have some classics," McHugh says.
The 747-400s will be primarily operated for wet-lease customers. But Southern also expects the new fleet to be used on charters, including military charters. The majority of Southern's business, about 70%, is now generated from its wet-lease or ACMI operation.
This is not the first time Connecticut-based Southern has looked at the 747-400SF. In 2007 the carrier, after being acquired by US private equity firm Oak Hill Capital, said it planned to begin acquiring 747-400SFs. But the carrier in 2008 dropped these plans, deciding to instead focus on acquiring 777Fs. A year ago ATI reported that Southern was looking at opportunities to acquire additional 747-200/300s rather than switch to newer 747-400s.
"We modified our strategy of buying more 747-200s to 747-400s for the cornerstone of our fleet renewal," McHugh explains. "We're now in the process of bringing in 747-400s into the Southern fleet and will start retiring our oldest -200s."
Southern leases both its 777s from OH Aircraft Acquisition, a leasing company in the portfolio of Oak Hill Capital. The 747-400s Southern now intends to lease are owned by other leasing companies but Southern declines to identify the leasing companies.
While the initial five 747-400s are all newly converted aircraft, McHugh envisions taking over the next five years a mix of converted and second hand production freighters for a total fleet of 14 to 15 aircraft. He says Southern is open to operating freighters which have been converted by either 747-400 cargo conversion supplier - Boeing and Israel Aerospace Industries (IAI).
"Ideally the incoming -400s will be a combination of converted freighters and production freighters, which we think will become available over the next few years," McHugh says.