Avolon targets air cargo market in aircraft conversion deal

Dublin-based aircraft lessor Avolon says it is intent on becoming a major player in the global air cargo market, a sector in which revenues are forecast to reach $150 billion (€129 billion) this year.

Avolon chief executive Domhnal Slattery said the company was focused on "capitalising on the unparalleled growth in e-commerce" by agreeing a deal to convert passenger aircraft to carry more cargo.

The lessor has signed an agreement with Israel Aerospace Industries (IAI) for its Airbus A330-3000 freight conversion programme. The deal sees Avolon taking 30 conversion slots from 2025 to 2028. The Irish lessor owns more than 200 A330 aircraft.

The conversion programme increased cargo volume capacity with up to 27 main deck pallet positions and would lead to a better loading performance, Avolon said.

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“Air cargo traffic is expected to double over the next 20 years. This agreement signals Avolon’s intention to be a leading player in that expansion,” said Mr Slattery. “We believe the IAI A330-300 P2F will be the wide body freighter of choice this decade and beyond, replacing retiring aircraft and providing the volume capacity required to meet market needs,” said Mr Slattery.

“In partnering with IAI, we have identified the most efficient operator in the freight conversion market, guaranteeing more cargo pallet capacity and, crucially, faster turnaround times, in a market where every inch and second count,” he added.

The new deal comes weeks after Avolon announced the first deals for its VA-X4 electric, vertical take-off and landing (Evtol) aircraft.

In related news, Dublin-based Genesis has entered into an agreement with Boeing to convert two 737-800 aircraft into freighters.

The first converted aircraft will be ready to enter service in spring 2022 with the second scheduled to begin operations a year later.

Meanwhile, Avolon confirmed that it had increased its revolving credit facility by $1.1 billion to $4.3 billion and extended the repayment to 2026 from 2024.

The Irish company also repaid about $650 million of secured debt during the third quarter.

At the end of September, Avolon owned or managed 585 aircraft, with total orders for a further 246.