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01 March 2005
The world air cargo market is growing and much of this growth will be reliant on converted aircraft. But as Alexandra Cain discovers, knowing which conversions to finance and when, can be a tricky process.
Banks tend to focus on new shiny aircraft. They track
aircraft orders and follow sales campaigns but few care about
what will happen after 12 years (at least until deals go
This short-sightedness means that few banks have ever studied
the cargo market. They may have bid for a new Cargolux, Air
France or Cathay Pacific 747 freighter - but they have
not looked at conversions.
This means that they are missing out on one of the fastest
growing aviation markets.
Recent forecasts by the large manufacturers have revealed that
their predictions for world air cargo traffic are rising - and
almost three-quarters of this demand will be filled by
converted aircraft. If this happens, airlines must be able to
finance these conversions.
Passenger-to-freighter conversions can cost
anywhere between $4.5 million to $25 million - and when
maintenance is added it can easily cost more than this. The
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