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Industrials
Size
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Market Cap £6.74bn
Enterprise Value £7.39bn
Revenue £3.89bn
Position in Universe 247th / 6093

Airbus, ST Engineering to expand A321 freighter conversion programme

Tue 27th October, 2020 8:39am
SYDNEY, Oct 27 (Reuters) - Airbus and Singapore's ST
Engineering said they would set up new sites in China, Germany
and the United States by 2023 to convert A321 passenger planes
to freighters after the first one entered service with Qantas
Airways Ltd  QAN.AX  on Tuesday.
    The Elbe Flugzeugwerke GmbH (EFW) joint venture between
Airbus SE  AIR.PA  and Singapore Technologies Engineering Ltd
 STEG.SI  will expand beyond Singapore allowing it to convert
around 25 planes each year to meet rising demand for dedicated
cargo aircraft, they said in a statement.
    About half of the air cargo carried worldwide normally flies
in the belly of passenger jets rather than in dedicated
freighters. But pandemic-related flight cuts due to weak travel
demand have squeezed air freight capacity.
    "The completion of our first A321P2F is timely, as the
programme can help airlines breathe new life into underutilised
aircraft, which would otherwise suffer a harder landing in their
residual value," said Jeffrey Lam, president of ST Engineering's
aerospace division.
    Advisory firm Ishka says the market value of a 10-year-old
A321 passenger plane has fallen by 16% to $21.5 million since
January, while the monthly lease rate is down 33%.
    The first A321 converted freighter is operated by Qantas on
behalf of Australia Post and includes a large main cargo door
which is hydraulically actuated and electrically locked, the
joint venture said.

 (Reporting by Jamie Freed; editing by Jason Neely)
 ((Jamie.Freed@thomsonreuters.com;))
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