Wedoany.com Report on Feb 26th, Air Transport Services Group (ATSG) recently announced the dissolution of its joint venture with Precision Aircraft Solutions for converting Airbus A321 passenger aircraft into full freighters, primarily due to a decline in market demand for A321 freighters. ATSG is one of the world's leading freighter leasing companies, providing air cargo services for clients such as Amazon and DHL.
Erickson Incorporated, through its subsidiary Precision Aircraft Solutions, has acquired the full ownership of 321 Precision Conversions from ATSG, with the transaction price undisclosed. Precision Aircraft Solutions specializes in aircraft conversion kit design, while Erickson Group is renowned for its heavy-lift helicopter operations.
Converting an A321 into a freighter involves stripping the passenger cabin and adding new features such as a wide cargo door and heavy-duty floor beams. Precision Aircraft Solutions previously focused on passenger-to-freighter conversions for Boeing 757 aircraft, but as the supply of 757s diminished, the A321 was seen as a replacement due to its similar capacity and higher fuel efficiency.
Precision and ATSG established the joint venture in 2017, aiming to profit from conversion services and leasing A321 freighters. The Precision joint venture has completed over 30 freighter conversions, with operators including India's Blue Dart and Miami-based Global Crossing Airlines. ATSG also leased A321 freighters to Malaysia's Raya Airways. Elbe Flugzeugwerke is another company performing A321 freighter conversions, but the narrow-body freighter market has contracted over the past 18 months due to slowing air cargo demand.
Latvia's SmartLynx Airlines ceased its cargo operations last year, impacted by the cancellation of a DHL contract. Meanwhile, issues with Pratt & Whitney engines have prompted airlines to retain A321neo passenger aircraft, further squeezing demand for freighters. Some A321 freighter owners have responded to market pressures by leasing out their aircraft without engines.
Dylan Garner, President of Erickson Group, stated, "We firmly believe in this platform, the 321 Precision Conversions team, and the long-term demand for narrow-body freighters. We are excited to build upon this foundation and continue investing in the next phase of growth for this project."
ATSG, following its acquisition by private equity firm Stonepeak, indicated it will continue to promote A321 converted freighters, but market adjustments reveal challenges in demand for narrow-body freighters.
