Airplane Services believes that the cargo conversion market could be worth $15 billion over the next 20 years
Guy Norris/LOS ANGELES
When is "special" really special? This is the question being asked by the air cargo market as Boeing Airplane Services (BAS) prepares to begin certification flight tests of its first major conversion effort, the 757-200SF (Special Freighter), from its modification centre at Wichita, Kansas.
As first flights go, the November sortie is expected to be fairly routine for the tried and tested 757. For BAS, however, and launch customer DHL, the flight will be anything but a standard event. For BAS it is tangible proof that it is serious about a conversion market which it believes could be as large as 1,500 aircraft over the next 20 years. Of this $15 billion or so-worth of conversions, two-thirds will be either Boeing or former McDonnell Douglas types.
Unlike former Boeing conversion efforts, which were on a piecemeal, airframe by airframe basis, the BAS initiative is wider-reaching. It combines the engineering, marketing and support strengths of the parent company with a widespread network of "alliance partners", sub-contractors and suppliers, many of which are already deeply involved in BAS's global modification and engineering network set up in early 1999. This includes Aeronavali of Italy, BFGoodrich, Israel Aircraft Industries (IAI), Singapore Technologies Aerospace and its ST Mobile Aerospace Engineering arm in Alabama, a group of Taiwanese companies, SR Technics of Switzerland and TAECO of China.
Confidence comes from the performance to date of the DHL 757 programme. "All in all, it has already been very successful," says BAS passenger to freight conversion vice-president Mike Stewart. "We are really ahead of the curve, and we believe we will be able to deliver the first 757 around five or six months ahead of when itwas originally planned." IAI and Singapore Technologies are alliance partners in the DHL programme and both have engineers on-site at Wichita during the early stages.
Up to 44 Boeing 757-200SFs are set for delivery to DHL, the first expected to be handed over around 21 December. A second aircraft is due to arrive in Wichita to begin conversion in October, while a third is to fly to Singapore Technologies' site in Mobile, Alabama, to begin modification in February. A fourth will go to IAI's Tel Aviv site in Israel to start its modification there in March. Unit list price for the conversion is around $7 million.
Under current plans, Boeing will perform only the first two modifications, with 16 aircraft converted at each of the two sites in the USA and Israel. The schedule calls for deliveries to run through to early 2003, though Stewart adds "there is a lot of flexibility in that". Factors which could change this include additional orders, either from DHL or other sales campaigns currently under way, or requests from DHL to speed up deliveries. Wichita will retain the role of programme management and provide "surge capacity".
By mid-September, engineers at Wichita were 50% through the first modification of an ex-British Airways 757-200. The conversion, which began in July, involves structural strengthening of floor beams and frames on the main deck, plus the replacement of an entire part of the forward fuselage. The replacement Section 43 crown, side fuselage portion and door surround comes complete from Renton, Washington. A standard -200F production, 3.4m (11ft) by 2.18m, upward-opening cargo door is supplied by Northrop Grumman. Although the kit comes complete from Renton, BAS says future kit components will be progressively produced in-house by alliance partners to increase their workshare.
The scale of the replaced fuselage section is relatively large because Boeing engineering analysis proved that it was structurally most sound, and a lot easier to use existing production breaks as the starting point for the conversion. Although Stewart says that commonality with two new build 757-200PFs that DHL operates was an important design aspect, the converted aircraft will offer one less pallet position (14) as it retains the passenger version's larger forward entry door layout.
BAS sees the DHL 757 project as a vital blueprint for all future cargo conversions, both in terms of engineering technology and programme management. "The programme is very significant in the Boeing company because of the way it is being conducted as a total systems solution for DHL," says Stewart. "We are participating in the acquisition of the aircraft from BA, and using the production shops of both our own company and our partners to do it, and we are using all the available facilities to do the modification work itself."
Special 737s and 767s
With the 757SF launched and well under way, BAS is focused on bringing its next two offerings to market as soon as possible. The 737-300/400SF and 767-200SF are both likely to be launched by year-end, with a combined market potential for 400-plus aircraft.
Talks with two potential US airlines and "other overseas customers" continue, says Stewart. "We have identified the two alliance partners we want to work with. We are targeting for a programme go-ahead and launch agreement by the end of the year - and maybe a bit earlier than that if we can," he adds.
Using the 757 programme as a template for the 737SF conversion, which will be aimed at both the -300 and -400 "Classic" variants, BAS says each partner will have its own dedicated engineering team allocated to the effort.
BAS predicts that between 200 and 250 aircraft could be converted, split roughly 50:50 between the two models. The prediction is somewhat more conservative than that of Pemco, the Dothan, Alabama-based modification specialist which last month signalled its intent to relaunch a similar 737 "Classic" conversion programme (Flight International, 22-28 August). Pemco, which was originally teamed with Boeing on an earlier limited 737 conversion effort, "conservatively" estimates a potential market of up to 300.
Although Pemco believes it can beat BAS's programme into service by between one year and 18 months, BAS says its own effort could be delivering the first 737SFs by mid-2003 if launched by year-end. The entire programme is expected to take between 15 and 18 months from launch to entry into service, with conversion taking between 45 and 60 days per aircraft, says Stewart. "Boeing also has used aircraft groups actively involved in sales campaigns for new aircraft, and they are involved in turning those over which gives us a great source of aircraft for conversion," he adds.
With engineering work on the 767-200SF complete, BAS predicts the first aircraft could be in service in as little as 12 months after induction. Stewart says interest is high, and commitments from only "two or three" customers will assure go-ahead which could come within the next few months. BAS predicts a market for more than 100 conversions, and has signed a partnership deal with Aeronavali in anticipation of a launch. The company has also begun engineering study work on a more substantial conversion for the 767-300, for which an even larger potential market could develop in coming years, says Stewart. Like the -200SF, the
-300SF will use the 2.67m x 3.4m forward freight door designed and produced in large numbers for the -300F model launched for UPS.
Engineering work also continues on a potential MD-82SF variant, which BAS says could make "...a good regional freighter in Asia as airlines replace MD-80s with 737s". Originally set for possible go-ahead in 2004, this programme has been both accelerated and slowed down again. "I think it will be before 2004," says Stewart. Another conversion programme that looks more like sticking to the 2004 estimate is the proposed 747-400SF modification. "We are having active discussions with potential partners who'd like to get involved," he adds. Timing of the launch depends on continued development of the large cargo market, and the residual value of the -400 which is currently too high to warrant the cost of conversion.
BAS, meanwhile, continues to work the 747 "Classic" conversion market and will perform its 100th by this time next year. In work, or in backlog, it currently has four -300s, and four -200s, one of which is undergoing modification at TAECO. Overall, in addition to its ongoing MD-10/MD-11 freighter modification work, the prospects appear buoyant for BAS and confidence is high that its overall conversion orderbook for all Boeing types will soon reach "Classic" proportions in its own right.