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Cargo conversions pacing lucrative transport upgrades
The world-wide air cargo fleet is primarily comprised of pre-owned passenger-configured transports which have been converted for the freighter role. This fleet is entering a re-equipment cycle as many 727, DC-8, 707 and early model 737 and 747 aircraft are being parked in the desert and most of these are expected to be replaced by larger aircraft. Conversion programmes for four Boeing models - 737-300/400, 747-400, 757-200, and the 767 - are gearing up or are about to be launched and new players are vying for the work. "Start-up firms such as Precision Conversions, Aeronautical Engineers, and Structural Integrity Engineering have thrown their hats in the ring and Boeing may be hard pressed to match the competitive conversion costs of some of the newcomers," said Forecast International senior aerospace analyst Bill Dane. The 10-year cargo conversion market is estimated at $14.5 billion. A recent FAA mandate will require installation of traffic alert and collision avoidance systems (TCAS II) aboard nearly all US-registered freighters by the end of 2004. Approximately 800 aircraft will be affected by the decree, although some US cargo operators had already begun the installations. The military also makes use of modified airliners for some of its specialised missions. According to Dane, "perhaps the most visible example of this is the US Air Force plan to lease 100 Boeing 767 commercial transports, suitably modified for the aerial tanker role. " These will be new production aircraft, however, and fall beyond the scope of the new study. The 767 has already been selected by several overseas air forces to fill Tanker Transport and Airborne Warning and Control System (AWACS) requirements, and modified ex-British Airways 767s are in the running for a 20-aircraft UK aerial tanker requirement. The US Air Force and many overseas air arms will be carrying out electronics/avionics upgrades to their transport fleets in the coming years, primarily to update the onboard navigation systems. Perhaps the most lucrative programme will be the US Air Force's Global Air Traffic Management (GATM) upgrades for its C-130s, KC-135s, and KC-10s, expected to account for more than $1 billion in funding through 2012. Defensive Electronic Warfare (EW) system upgrades and retrofits to military transports is another growing market. In the United States alone, 130 transports will be fitted with the new large aircraft IR countermeasures (LAIRCM) system in a programme valued at about $1 billion. Overall, this is a significant market and one which will continue to provide opportunities for participants able to offer solutions combining a rational balance of cost versus capability.
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A new Forecast International/DMS study of The Commercial and Military Transport Retrofit & Modernisation Market - 2003-2012 is projecting increasing opportunities for companies involved in cargo conversions, electronics/avionics retrofits, and aerial refuelling modifications. The total 10-year market for these upgrades is conservatively estimated at $24 billion.