Wagner plans to launch 767 cargo conversion programme

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Wagner Aeronautical is preparing to launch a passenger to freighter (P2F) conversion programme for the Boeing 767-300ER, providing a third PTF option for the 767 after Boeing and Israel Aerospace Industries (IAI).

Wagner CEO William Wagner says his small California-based firm, which designed the Boeing 757-200 P2F product now sold by Precision Conversions, has been "tinkering" with a 767 P2F product for the last two years and believes demand for 767 conversions is now sufficient to support a third conversion provider.

"We're hoping by the end of this year or the first quarter of next year to make a [launch] announcement," Wagner told ATI and Flightglobal on the sidelines of the 20 October Cargo Facts 2010 Aircraft Symposium in Miami.

Wagner says he intends to launch the programme with an order for over 10 aircraft from a single customer which he expects to secure over the next couple of months. Once launched, Wagner expects the certification process to take two years. He says the maintenance firm performing the initial conversions is still to be determined but he now talking to shops in Asia and the US.

767-300ER conversions are currently done in Singapore and Israel. The Singapore conversions are performed by Singapore Technologies Aerospace but marketed by Boeing. The Israel conversions are offered by a joint venture consisting of IAI and Japan's Mitsui. Boeing says it has done six 767-300ER conversions so far with a seventh to be completed by the end of this year while IAI says it has done three 767-300ER conversions with a fourth to be completed by the end of this year.

Wagner says he has held back the last two years in joining Boeing and IAI in the 767-300ER P2F market due to the economic downturn, which has impacted demand for converted freighters. "That is changing," Wagner says.

He adds that a lack of available 767 passenger aircraft, primarily due to delays in Boeing 787 deliveries, was a second factor. But feedstock is expected to improve as 787 deliveries are finally set to begin next year.

He says Wagner has not yet decided whether to launch the programme on its own or with a joint venture partner. For the 757 Wagner partnered with the Erickson Group in 2001 to form Precision Conversion. Wagner was the lead design firm during the development phase with Bill Wagner serving as VP of engineering. But Wagner has since exited the joint venture and no longer has a stake in Precision.

While Wagner has never been involved in a widebody cargo conversion programme he says "the 767 is a natural jump for us off the 757. They are similar aircraft." Wagner Aeronautical, which was first established in 1993, also has provided engineering services as a subcontractor for conversion programmes involving the Boeing 727, 737 and 747. Wagner says while his firm is small - its core group only consists of 12 employees - it has the potential of spooling up and securing the capital needed to launch a 767 PTF programme without a commercial partner.

Earlier this year Wagner elected to pursue a P2F product for the Boeing MD-80 on its own. Wagner announced in February it was starting to offer a P2F conversion for the MD-80 and had entered into an agreement with Boeing to license the manufacturer's engineering data to support its pursuit of an STC for the MD-80SF. But Wagner says his firm is now reconsidering pursuing the MD-80SF and it is more likely the 767-300ER will be Wagner's next project.

"We're kind of holding, waiting for a launch customer," Wagner says of the MD-80.

When Wagner announced the MD-80SF programme in February he said he was expecting to secure a launch customer within a few months. "That hasn't worked out to date," he says. "It was not as firm as we thought."

Aeronautical Engineers (AEI), only a couple of days after Wagner announced its plans to pursue the MD-80SF, launched its own product for the MD-80SF. AEI also has a license from Boeing that gives it access to the manufacturer's data. But, unlike Wagner, AEI decided to acquire a used MD-80 and start working on a prototype before securing a launch customer.

"I don't think the MD-80 is one I want to speculate on," Wagner says. "It's an unproven entity."

Wagner believes the MD-80SF market will be relatively small but is still potentially large enough to support two players. He acknowledges AEI will be first to market as it has already embarked on the certification process which is expected to result in an STC in the third quarter of 2011. "They definitely have an advantage but there's always room for two," Wagner says.