The surge in e-commerce demand, port congestion, and limited airline capacity due to the pandemic have led to a record increase in air freight rates just before Christmas 2021. This situation has also created a profitable opportunity for the aerospace industry, specifically in converting passenger planes into cargo carriers. Cirium, an aviation data firm, reported a record-breaking 164 planes converted to freighters in the past year.
Fortunately, air cargo rates have since declined, primarily due to the influx of new capacity from the resurgence in air travel. Most of the air freight is transported in converted passenger planes and dedicated freighters. As a result, the Baltic Air Freight Index has seen a decrease of over 48% from the previous year.
In facilities across the globe, from Texas to Singapore, technicians are working diligently to convert old passenger planes into cargo carriers. This process involves removing old seats, galleys, lavatories, and other components of the plane, often revealing remnants of its past life carrying passengers, such as crumbs and children’s toys.
Once the old interior is stripped, technicians reinforce the plane’s floor to support heavy cargo loads. They also create a specialized doorway, allowing for easy loading and unloading of goods onto the aircraft. This conversion process can take several months and cost millions of dollars per plane, including maintenance expenses. Despite the decline in shipping rates, companies specializing in this business continue to receive orders for plane conversions.
CNBC had the opportunity to visit Aspire MRO and Mammoth Freighters in Fort Worth, Texas, where they witness the Boeing 777 wide-body aircraft being transformed into massive cargo haulers. To get a closer look at the conversion process, watch the accompanying video.
All in all, the rise in air freight rates has led to increased demand for converted cargo planes, and companies in this industry are capitalizing on the opportunity. Despite the challenges posed by the pandemic and declining rates, the conversion business remains robust and continues to serve the evolving needs of the aviation and logistics sectors.
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