EVERETT – It’s a $55 billion business.
But the air cargo market frequently gets overlooked in favor of the passenger side of the business estimated to bring $355 billion in revenue around the globe.
The world’s longtime leader in providing freighters, the Boeing Co., has taken steps in recent years to make sure the company covers all its bases when it comes to cargo. On Wednesday, Boeing announced that it lined up a subsidiary of Singapore Technologies Aerospace Ltd. to convert 767-300 passenger jets into freighters. The deal is worth $136 million over 10 years.
“Building on our excellent partnership … I am confident that ST Aerospace will continue to support Boeing in delivering a converted freighter that is economical to maintain and operate,” said Marco Cavazzoni, vice president of freighter conversions for Boeing Commercial Airplanes.
ST Aerospace has modified several models of passenger planes to freighters, including 757s, DC-10s and MD-11s.
Boeing predicts that about 75 percent of the world’s cargo demand over the next two decades will be met by converting passenger jets into freighters. It’s less expensive for an airline to modify a passenger plane already in its fleet to a cargo jet than it is to buy a new freighter. Boeing lists its new 767-300 cargo planes at $143 million to $155 million, although airlines rarely pay book price.
Boeing offers freighters ranging in size from its small 737-700 Convertible – a freighter-passenger plane – up to its 747 jumbo jet. In recent years, the company launched a freighter version of its 777 as well as an updated large freighter, its 747-8. Boeing estimates that it provides more than 90 percent of the world’s freighter fleet.
Planemaker rival Airbus agrees with Boeing that the majority of the world’s freighter fleet over the next 20 years will be provided through passenger-to-cargo plane conversions. The European company recently launched its A330-200 Freighter, a mid-size cargo plane that matches up most closely with Boeing’s 767 freighter. Airbus plans to discontinue its A300-600 Freighter this year and has halted work on the cargo version of its A380 superjumbo jet.
To modify a Boeing 767-300 passenger jet into a cargo plane, ST Aerospace workers have to remove the seats, other furnishings and interiors. They install cargo doors, a rigid freight barrier and a cargo handling system.
“We will continue to leverage on our engineering and modification capabilities to bring greater value to Boeing’s customers globally,” ST Aerospace President Tay Kok Khiang said in a statement.
ST Aerospace will convert the first aircraft for ANA, Boeing’s launch customer for this program, at its facility in Singapore beginning in October. The prototype is expected for delivery in June 2008, upon FAA certification.
Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.
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