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Will the passenger-to-freighter market survive amid the economic downturn and ongoing environmental concerns? Air Cargo Middle East & India takes a reading from the sector's biggest players.

To an outsider, the future of the freighter conversion sector can seem filled with paradoxes. On the one hand, one could argue that a high jet fuel price and a focus on green initiatives is likely to be mean that older, more inefficient jets will face being phased out of service rather than being subjected to conversion schemes, especially as some firms look to downsize their fleets.

Added to this, it is obvious that Middle Eastern carriers operate some of the youngest fleets in the skies, and that buying converted aircraft goes against this ethos. On the other hand, however, one could say that the poor current economic outlook will lead more carriers to order converted freighters, which are still cheaper than new ones.

Furthermore, the long-term outlook for both Boeing and Airbus, the two global manufacturing giants, indicate that the prospective market for aircraft purchasing is sound, with both players having order-book backlogs stretching ahead for several years into the future.

But arguments against the good health of the sector have been resolutely thrust aside by industry insiders. Current models are always being considered for Supplemental Type Certificates (STC), and as new models - such as Boeing's 787 Dreamliner and the Airbus A380 - come online more, older models will become available for conversion, models that are more fuel-efficient than the freighters that are now plying their trade.

An analysis of the trends being witnessed by the Passenger to Freighter (PTF) sector certainly helps shed a little more light on how the market is expected to develop in the long term. As a starting point, Boeing's 20-year forecast for the aircraft industry posits that the largest demand for freighter deliveries during this period will remain in North America, with the Asia Pacific region having the second highest demand.

"The greatest growth rates continue to be those connecting Asia to North America and Europe, due to Asia's continuing role as a manufacturing centre, with most routes projected for air cargo growth outpacing the global annualised average of 5.8%," argues George Peppes, marketing manager of business and campaign support, Boeing Commercial Aviation Services. "This growth rate of 5.8% still represents a tripling of world air cargo traffic during the next 20 years compared to current levels."

For Airbus parent company EADS, there is something of a hiatus in the market at present, although this is due not only to a slowdown in the West, but also as a result of a natural pause as new technologies and other changes come on line. "The freighter market is slightly hesitant at the moment," says Wolfgang Schmid, vice president of sales, marketing and customer support for EADS.

"Appropriate airframes have not been available and now everybody is watching prices and the conditions for available aircraft as substantial changes and moves are expected. It's important to note that the availability of suitable airframes is absolutely key for the conversion business."

From a geographical perspective, there are some trends that industry observers have noted, although these are by no means as obvious as one might think. "In the US, we have seen PTF programmes replacing very old aircraft, while in China and India, the sector is used to service growing domestic and express environments," says Frauke Oberdieck, vice president of corporate communications for Netherlands-based AerCap Aviation Solutions.

"For Europe and Australia we are again seeing the replacement of old and inefficient aircraft, while in Latin America, PTF fulfils a niche requirement for the small jet freighters that are needed for regional coverage."  Boeing, on the other hand, confirms that there are no particular trends in terms of numbers, as orders for its programmes are steadily coming in from all regions.

In terms of trends for narrow-body aircraft as opposed to wide-body jets, Boeing's Peppes predicts that demand for its narrow-body freighters (such as the 737 and the 757) will all come from conversions, as is evidenced by FedEx's order of 87 757-200SFs over a seven-year period from ST Aerospace, which operates on a specific STC based on licensed engineering data from the manufacturer. The Singapore-based company is justifiably proud of this achievement.

"We have made good progress in our B757-200 programme for FedEx, and conversion activities are in full swing following the FAA's approval of our STC in April this year," says Tay Kok Khiang, president of ST Aerospace. "From the aircraft induction to approval, this STC was achieved in 11 months, a relatively short amount of time."

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