Good opportunities in long term: HAECO

Short term adverse conditions in the industry are not likely to dampen signifi cant passenger to freighter conversions over the longer term, according to HAECO.

Airbus conversion Albert Leung cargo conversion HAECO STAECO TAECO

Soaring aviation fuel prices are already adversely and significantly affecting the entire aviation industry, including the maintenance, repair and overhaul (MRO) portion of the industry and the cargo conversion specialty business within that segment, causing volatility and challenges, an executive says.

“In the short term there has to be a degree of uncertainty, but depending on the aircraft conversion type, we think there are still promising opportunities available in the long term,” says Albert Leung, General Manager Marketing of Hong Kong Aircraft Engineering Company Limited (HAECO).

Commenting on freighter conversion market, Leung says it is heavily dependent on the cargo conversion window, which is refl ected by the difference between the market price of available passenger feedstock aircraft and the market demand of converted freighters. “At present (in the market) for feedstock is affected by delays to the A380 programme which has resulted in some operators holding onto their 747- 400 passenger aircraft. The fuel price increase has also influenced operators to hold their 747-400 rather than the 747 Classics.

“Similarly the output market is always affected by the short-term demand for cargo lift capability which at present is showing signs of relative weakness. A similar argument applies to the 767-300 conversion market which is affected by 787 delays,” Leung says.