Airbus, Singapore Technologies to Convert A330s to Cargo Planes

Airbus SAS (EAD) formed an alliance with Singapore Technologies Engineering Ltd. (STE) to convert A330 wide- body passenger jets into freighters, helping the European planemaker expand in a market largely dominated by Boeing Co. (BA)

ST Aerospace will lead the A330P2F engineering development, working with Airbus and EADS’s EFW facility in Dresden, which will subsequently be responsible as program lead during the industrial phase, Airbus said today in a statement. Most of the conversions will be done at EFW’s facilities in Dresden.

With more than 830 A330s operating worldwide today, airlines would be able to wring value from older A330 planes by having them converted for cargo before replacing them.

“This is something we have been looking at within Airbus for some time, which a number of our customers have been asking us to evaluate,” said Airbus Chief Executive Officer Tom Enders today at a briefing in Singapore.

The only cargo plane Airbus currently builds itself is the A330-200 freighter. A converted passenger model would offer a less costly alternative. A freighter-refit facility in Dresden, Germany, owned by the planemaker’s parent European Aeronautic, Defence & Space Co. currently works only on the A300 and A310 models, which has left a gap in the market.

Boeing Offering

Boeing has a far larger offering of new-build cargo planes than does Airbus, producing cargo versions in every size including the 737-700 convertible, the 767-300 freighter, 777 freighter, the 747-400, and the 747-8 freighter, which began service two years late in 2011. Airbus had planned to build an A380 freighter, though difficulties with the passenger variant of the plane forced it to postpone the plan indefinitely.

Enders said Airbus sees a need for 2,700 or 2,800 cargo aircraft in the next 20 years, with “almost all of this demand will in the mid-sized category” occupied by the A330. The converted A330 would “compliment very nicely our new-build 330-200 freighters,” he said.

Qatar Airways Ltd, is looking to convert 15 A330s for cargo use by 2016, CEO Akbar Al Baker told journalists in May. The airline might opt to use converted Boeing Co. 767s instead. if Airbus is unable to undertake the conversion, the executive said at the Dubai Air show.

European Center

EADS EFW will become the European center for ST Aerospace’s global maintenance, repair and overhaul operations, Airbus also said. The project is subject to the definitive agreements being finalized in the coming weeks and also to regulatory clearances.

Airbus several years ago sought to establish a joint venture with Russia’s United Aircraft Corp. converting narrow- body jetliners to cargo planes. It scrapped the venture in June, saying demand had dropped and used jets were being bought for passenger use.

To contact the reporters on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net; Andrea Rothman in Paris at aerothman@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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