IBA highlights risk of oversupply of this converted aircraft type, also pointing to the growing number of commitments for Airbus A321 P2F conversions

The Boeing 737 family continues to dominate the narrowbody P2F (passenger to freighter) conversion market, spearheaded by the 737-800, according to insights from leading aviation market intelligence and consultancy company IBA, in a freighter values webinar.

IBA flagged the risk of oversupply of this converted aircraft type, and also highlighted the growing number of commitments for the Airbus A321 P2F and how this could become the successor to the long popular Boeing 757 freighter. It also highlighted the continuing reduction in feedstock aircraft age of the popular conversion types.

In the 2022 year to date, there have been 52 B737-800 conversions, with 63 in 2021 as a whole, whereas the total of five A321 conversions in 2021 has already been surpassed by nine conversions in the year to date.

In the first of a six-part webinar series, IBA’s experts provided an update on freighter values by aircraft type, revealing:

  • The Boeing 737-800 P2F has a substantial fleet of 121 active aircraft, with 47 aircraft pending conversions, and 33 in storage. Lease rates remain stable at around US$180,000 per month.
  • The Boeing 757-200 P2F has a fleet of 235 active aircraft (184 Rolls-Royce powered and 51 Pratt & Whitney). Additionally, there are 24 aircraft pending conversion and 37 stored aircraft. Lease rates remain stable at around US$190,000 per month.
  • Demand for the Airbus A321-200 P2F is coming from operators including Global Crossing Airlines, Express Freighters Australia, IndiGo, Lufthansa Cargo, SmartLynx Malta, Titan Airways. There are only 10 active aircraft, but 43 pending conversion.
  • There is currently high demand for the Airbus A330-300 P2F with conversion customers including Altavair Airfinance, ATSG, Avalon (IAI), CDB Aviation Lease Finance, DHL, MNG Airlines, Stratos Aircraft Management Ltd and ULS Airlines Cargo. There are 17 active aircraft with another 22 pending conversion.
  • IBA considers the A330-200 P2F more of a niche type freighter, with five active aircraft and a further seven pending conversion.

IBA forecasts a potential overall softening of freighter values and leases, with rising capacity and softening demand create pressure on cargo yields.