B737 dominating narrow-body P2F market but risk of oversupply, IBA Insights show

The Boeing 737 family continues to dominate the narrow-body P2F (passenger-to-freighter) conversion market, spearheaded by the B737-800, according to insights revealed by IBA, a leading aviation market intelligence and consultancy company.

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 edition of a new six-week webinar series entitled “Ask the Appraiser’, IBA’s experts provided an update on freighter values by aircraft type. The webinar revealed that:

• 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 ten 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 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 creating pressure on cargo yields.