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Vietnam Airlines to Convert Two Airbus A321 to Freighters

Our Bureau - : Sep 14, 2022 - : 11:51 am

Vietnam Airlines plans to convert two of its Airbus A321 passenger planes to freighters. The country’s flag carrier is preparing to create a freighter division to help capture more intra-Asia freight growth.

The airline has entered into an agreement with the Air Transport Services Group for the conversion of the aircraft into cargo jets.

Once modifications are completed, ATSG will lease the planes back to Vietnam Airlines, ATSG CEO Rich Corrado said. ATSG is one of the largest lessors of freighter aircraft and is rapidly expanding its customer base beyond the U.S.

Cargo is a core source of revenue for every passenger airline, but it has not always accounted for a large percentage of airline revenue for passenger carriers, that are not also operating freighters.

Airlines are lining up to convert old passenger planes into freighters. Demand in the freighter sector has sparked interest from lessors; airlines; maintenance, repair, and overhaul (MRO) service providers; investors; funds; and other financial institutions. Many are keen to invest to hedge their existing passenger aircraft exposure, create new business lines around it, and/or build out their existing expertise (in the case of MROs/conversion specialists) to increase capacity and the range of conversion programs on offer.

The B737-800 freighter has been the most popular cargo conversion model so far in 2022, according to the latest research by consultant IBA.

IBA said that orders for conversion (P2F) of the narrow-body freighter had exceeded expectations.

The fleet has almost doubled in size, from 59 aircraft in April 2021 to 113 aircraft in April 2022, IBA said. “This demonstrates the Boeing narrowbody’s sustained appeal for passenger to freighter conversion,” IBA said.

While the B737-800 freighter is the up-and-coming future star, IBA figures show that the B757-200P2F remains the stalwart of the market, with a total of 259 aircraft in service as of April 2022.

“The period from April 2021 to 2022 saw the highest number of 757 conversions since 2018, with 13 aircraft converted in 2021 alone,” IBA said. “This is notably impressive given the now limited feedstock for the type.”

The second most popular freighter, the B767-300, also continues to see its fleet grow – from 127 to 156, driven by the “plentiful availability of feedstock aircraft from retiring passenger fleets”.

The annual conversion rates for the Airbus A330-200 and 300 “remain steady” and the new kid on the block – the A321 freighter – has doubled from four to eight aircraft over the past year. IBA expects conversions will continue to rise.

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