Boeing Bets on China Domestic Cargo Boom for 737 ConversionBloomberg News
Company has won 55 orders and commitments to convert planes
Sees China local cargo market at a third of global demand
Boeing Co. expects China’s domestic freight market to surge in the next two decades and said it will offer conversions for its bestselling 737 passenger jets into cargo planes.
The Chicago-based planemaker won 30 confirmed orders and 25 commitments from seven customers for the converted 737, Boeing said in a statement Wednesday. The aircraft will be primarily used to carry express cargo on domestic routes, it said.
Boeing predicted growth in China’s e-commerce market will boost demand for cargo planes. Customers will need more than 1,000 converted freighters the size of the 737 over the next 20 years, with China’s domestic air freight carriers accounting for almost one-third of the total market, according to the planemaker’s statement.
“Express air services in China now rely mostly on excess capacity in the belly of passenger aircraft,” Ihssane Mounir, Boeing’s senior vice president for sales in Northeast Asia, said at a ceremony in Shanghai to introduce the conversion program. “With the growth rate of China’s e-commerce market expected to exceed that of the air express market, we will see plenty of freighter demand going forward.”
The first of the converted freighters will be delivered in the fourth quarter of 2017. Conversions will take place in facilities near customers, including one in Shanghai, the planemaker said.
The aircraft has a range of 2,000 nautical miles (3,700 kilometers) and can carry as much as 52,800 pounds (24,000 kilograms) of cargo, Boeing said.
Boeing said it has won 30 firm orders and 25 commitments from these customers:
- YTO Airlines, based in Hangzhou, China, has ordered 10 conversions with commitments for 10 additional conversions
- China Postal Airlines, based in Beijing, has ordered 10 conversions
- GE Capital Aviation (GECAS), which will provide the initial airplane for conversion, has ordered five conversions
- An unannounced customer has ordered five conversions with two commitments
Boeing also said it secured 13 commitments for conversions from:
- SF Airlines, based in Shenzhen, China
- Cargo Air, based in Sofia, Bulgaria
- An unannounced customer
— With assistance by Anurag Kotoky, and Clement Tan