Passenger to Freighter Market Size, Share & COVID-19 Impact Analysis, By Build Type (New Build and Refurbished), By Aircraft Model (Narrow Body, Wide Body, and Regional Jets), By Fitment (Slot/Retro Fitment and Line Fitment), and Regional Forecast, 2022-2029

The global passenger to freighter market size was valued at USD 2.14 billion in 2021 and is projected to grow from USD 2.52 billion in 2022 to USD 5.19 billion by 2029, exhibiting a CAGR of 10.84% during the forecast period. North America dominated the passenger to freighter market with a market share of 28.5% in 2021.

The global COVID-19 pandemic has been unprecedented and staggering, with passenger to freighter witnessing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global passenger to freighter market exhibited a growth of 9.59% in 2020 as compared to 2019.

When a passenger aircraft reaches its age or has completed its operational service as a jetliner, it is either scrapped or converted into a freighter aircraft. Converting an airliner into a freighter is one way to extend the economic life of an aircraft. A significant number of cargo airlines have opted to operate modified freighters directly. The modified freighter meets the required high transport reliability, is more economical for the company, and achieves the same turnover without using the more expensive series freighter.

Majorly, a passenger to freighter (P2F) conversion involves changing the aircraft mission and configuration and adapting it to a new market, major structural modifications as required for the new configuration, installation of specific systems as required for the new missions, and certification - STC (Supplementary Type Certificate) or amendment of a Type Certificate (TC). P2F conversions are carried out by aircraft manufacturers (OEM), third-party contractors, or independent companies that enter into cooperation agreements with the OEM.

COVID-19 IMPACT 

Passenger to Freighter Market has Grown Amid Pandemic Due to Decrease in Passenger Travel

Since the COVID-19 outbreak in December 2019, the disease has spread to almost 100 countries around the globe, with the World Health Organization (WHO) declaring it a pandemic. The impacts of COVID-19 significantly impacted the market in 2020 and 2021.

Numerous airlines and other aircraft operators have found that the COVID-19 pandemic has robbed them of an important source of revenue, which is passenger traffic. With most global borders closed and individuals more interested than ever in international leisure and business travel, passenger numbers plummeted, prompting operators to seek alternative revenue streams to survive.

Moreover, as of March 2020, airlines were losing money due to a sharp decline in passenger numbers and aircraft hangars, maintenance and insurance costs, and many other operating costs. Stringent regulations, border closures, and travel fears were forcing airlines to turn their attention to cargo.

Additionally, during the pandemic, the sourcing and delivery of essential supplies have been one of many logistical challenges. Key players were focused on the delivery of passenger to freighter conversion solutions depending on the selected configuration of four to five tons of payload to deliver essential items, food, medicines, and others.

LATEST TRENDS

Growing Emergence of Commercial Airlines in Freighter Services is a Prominent Market Trend

The growing emergence of commercial airlines into the freighter business has changed the market scenarios for cargo operators around the world. It was not new that commercial airlines provide both passenger and cargo carrying services, but during the COVID-19 pandemic, when there was a sudden decline in passenger traffic, the major airline operators relied on transporting cargo, including medical and food supplies across the world.

These cargo-carrying services gave some airlines the spark to begin with cargo services and get their own converted freighter aircraft to expand their business in the commercial airline business. For instance, the major Indian airline, Indigo, relied on cargo transportation to continue with its operations at the time of the pandemic. The airline used passenger compartments to carry the cargo as it had no aircraft dedicated to cargo-carrying services. But recently, in October 2022, Indigo airline has entered into the dedicated-cargo segment by welcoming its first all-cargo plane, an Airbus A321P2F.

Indigo will receive three more converted A321s and plans to use the aircraft for both domestic and international missions

DRIVING FACTORS

Rise in Aircraft Conversion Facilities Infrastructure by Key Players Due to Increased Demand for Conversion Slots to Boost Market Growth

Owing to the increase in demand for passenger to freighter conversion, the key players involved in the market are focused on the conversion of standard and smaller narrow-body aircraft. This aircraft will be new to the conversion business and will require a new build conversion facility.

In June 2022, Embraer signed its first firm contract for the conversion of 10 E-jets to freighters to an undisclosed customer. The delivery of the freighter is expected to begin in 2024. This conversion is expected to take place at the manufacturer’s facility in Brazil and will include modification of the main deck front door, reinforcement of the cabin door, an adaption of a smoke detection system, and changes in the interior air management system.

Additionally, with the increase in demand for conversion of P2F, many key players are focused on developing new facilities and improving their capability of conversions. For instance,

• In May 2021, Israel Aerospace Industries (IAI) announced the opening of a new facility for the conversion of Boeing 777-ERSF from P2F with Sharp Technics at South Korea’s Incheon Airport. IAI has signed a Memorandum of Agreement (MoA) with the Incheon International Airport and Sharp Technics to establish a passenger to freighter conversion site in South Korea.

Elbe Flugzeugwerke continues to expand its capabilities. By 2024, it will increase its current capacity to the point where it will be able to produce about 60 converted aircraft per year - about 30 conversions for the A330 and the new narrow-body A321 - compared to 19 conversions it expects to carry out this year.

Growing Numbers of Adoption Converted Aircraft Over New Freighters to Drive Market Growth

Freight operators around the world are in a rush to find a newly converted freighter and will leave no stone unturned to find a P2F freighter that exactly fits their needs. Moreover, these P2F freighters revolutionize the freighter market as they fulfill all the regulatory requirements, thus making them a perfect choice for freight operators.

The most popular type in the main narrow body conversions segment is the B737-800 passenger aircraft, with 36 units converted in 2021, an increase from 27 in 2020. Moreover, the B757-200 passenger jet continues to be the first of choice for conversion in the large narrow body segment, with eight units converted so far in 2021, after 10 in 2020.

Other key players, such as Airbus, have also started gaining market share in this industry with Airbus P2F programs.

• For instance, in March 2022, Airbus freighter conversions announced that it received the Supplemental Type Certificate (STC) from the European Union Aviation Safety Agency (EASA) for its head-of-version A320 P2F aircraft.

The prototype is the first A320P2F aircraft to be developed in the world and joins the Airbus P2F program family, which includes A330-200P2F, A330-300P2F, and A321P2F. The A320P2F can accommodate 10 containers and one pallet slot on the main deck and 7 container slots on the lower deck. With a total payload of up to 21 tons, the cargo vessel has a loading efficiency of 85%.

RESTRAINING FACTORS

Overbooked Conversion Slots and Aircraft Backlogs Hinder Market Growth During the Forecast Period

Converting passenger aircraft into freight carriers is an intricate engineering process, and every aircraft and aircraft type is unique. The converting process requires a large number of manpower, resources, and time, leading to delays and backlogs of converted freighters. Moreover, due to the rise in demand for converted freighters, the key players involved in the market are now overbooked with conversion slots, thus hindering the market growth.

The bottleneck in the supply of P2F aircraft comes at the conversion stage, with the accessibility of slots at most key conversion facilities booked up until 2024 and 2026 in some cases.

Conversion plants are expanding, and new plants are being built, but these initiatives take time. For example, Boeing will expand its conversion business by building a passenger-to-cargo facility in Costa Rica. The plant is scheduled to go online sometime in 2023.

There were reports of aircraft that were thought to have been long retired and were being returned to service for conversion. Additionally, Boeing predicts that the overall cargo market will grow at 4% annually over the next 20 years, resulting in a 60% larger freighter fleet.

Obtaining and recruiting qualified personnel is also a major issue for conversation facilities, especially during travel restrictions. Therefore, countries around the world are developing their own strategies for living with COVID-19.

SEGMENTATION

By Build Type Analysis

Refurbished Segment Dominated Market in 2021 Owing to High Investment to Expand Conversion Capabilities by Key Players

By build type, the market is bifurcated into new build and refurbished. The refurbished segment dominated the market in 2021. Increasing demand for emergency air cargo transportation, supply of medicines, increase in r-commerce, and others during the COVID-19 pandemic surged an emergent need for the development of conversion facilities to meet the demand in the aviation industry. Due to this, there has been an increase in investment by the key OMEs and MRO service providers for expanding freighter conversion. Such factors will propel the P2F market growth.

The new build-type segment is anticipated to witness significant rise in CAGR owing to the increase in production capacity by major players.

• In April 2022, the three newly built Maersk Air Cargo Boeing B767-300F freighters will be deployed by Miami-based cargo carrier Amerijet on routes between the U.S. and China beginning this fall. Three of the new B767-300 freighters will be added to the U.S.-China operations, initially handled by third-party operators. The new aircraft is expected to operate from late 2022 through 2024

By Aircraft Model Analysis

Narrow Body to Grow at Highest CAGR Due to the Wide Usage in E-Commerce During the Forecast Period

Based on aircraft model, the market is segmented into narrow body, wide body, and regional jets. The narrow body segment is expected to become dominant in the market due to its wide range of applications in the e-commerce sector. Moreover, a single aisle conversion is economical and costs less than a wide-body aircraft conversion. Additionally, wide-body aircraft conversion will witness significant growth. The growth in the segment is due to increase in contracts for wide-body conversion. For instance, in November 2021, Israel Aerospace Industries (IAI) Aviation Group signed a contract with World Star Aviation to convert 10 B737-800 passenger planes into freighters. Cargo conversion will take place at Bedek Lingyun (Yichang) Aircraft Maintenance Engineering Co., Ltd (Belinco) in Yichang City, Hubei Province, China, and a partially owned subsidiary of IAI.

By Fitment Analysis

Slot/Retro Fitment Segment to Grow at Highest CAGR Due to Rise in Demand from MRO Service Providers During the Forecast Period

Based on fitment, the market is segmented into slot/retro fitment and line fitment. The slot/retro fitment segment is expected to become dominant in the market due to increase in focus by MRO providers to enter into the freighter market. For instance, in April 2022, China's first 767-300 Boeing Conversion Freighter (BCF) conversion line was opened on the campus of Guangzhou Aircraft Maintenance Engineering Company (GAMECO).

The line fitment segment is anticipated to show remarkable growth during the forecast period due to high investment by OEMs such as Airbus and Boeing. In December 2021, Elbe Flugzeugwerke (EFW), a joint venture established by Airbus and ST Engineering, flew its first A320P2F freighter P2F conversion from ST's facility at Singapore's Seletar Aerospace Park. The flight followed an eight-month retrofitting process in which the joint venture made several changes, including the addition of cargo doors on the main deck.

REGIONAL INSIGHTS

The global region is studied across North America, Europe, Asia Pacific, the Middle East, and the rest of the world.

North America is anticipated to show a significant rise in the freighter conversion market during the forecast period. In 2020 and 2021, domestic demand in the U.S. increased dramatically with the unprecedented growth in e-commerce generated by the lack of consumer mobility and a large infusion of government stimulus. This led to a surge in demand for freighter aircraft. Owing to this, the market in the North America region is anticipated to grow during the forecast period.

During the forecast period, the European market is predicted to grow significantly. Europe has the second largest market share with countries such as the U.K, Germany, and France. The growth in the segment is owing to the increase in adoption of passenger to freighter conversion due to economic advantage, low cost, and increase in the economic life of aircraft. Furthermore, in May 2021, Elbe Flugzeugwerke GmbH, a joint venture between ST Engineering and Airbus, is pleased to announce that the Airbus A321 P2F aircraft will be delivered from new customers to GTLK Europe, a leading global leasing company based in Dublin, Ireland is known to have ordered four modifications. Three of the four aircraft have been approved for modifications this year, with his fourth modification scheduled for 2022.

Asia Pacific is expected to showcase the highest dominance during the forecast period in the market. Asia Pacific should be the market of P2F due to the expansion of international trade, rise in air cargo activities, and others.  

• In October 2022, Pradhan Air Express operated its first commercial cargo flight using its own aircraft. This also happens to be the world's first A320 cargo diversion. The A320-200 (P2F) completed its first airline service on 1 October 2022, flying Delhi International Airport - Mumbai International Airport - Delhi. Flights from Delhi to Hanoi, Vietnam began on October 9.


• In September 2022, Indian airline Indigo launched the first converter freighter aircraft A321 P2F. The introduction of A321 P2F will help the airline offer cargo services on both domestic and international routes.

The Middle East region is expected to witness moderate growth during the forecast period. According to IATA, the Middle East airlines' annual passenger volumes in 2021 were 71.6% below 2019. The region is home to several prominent full-service airlines operating long-haul routes, including Emirates, Etihad Airways, and Qatar Airways. It suffered huge losses due to border blockade. For this reason, the demand for cargo planes increased during the pandemic. The market is expected to register aggressive demand to overcome large losses.

According to the rest of the world regional analysis, the market is expected to experience slow growth in 2022-2029 due to limited investment in this market. In August 2021, Ethiopian Airlines Group, in partnership with Israel Aerospace Industries (IAI), will establish a global standard cargo conversion program to convert B767-300ERs into dedicated freighter service. The cargo conversion center will begin its first operations with Ethiopian Airlines' three of its B767-300s. The Addis Ababa Airport center expands services to all airlines in Africa and the wider region. Such developments are anticipated to boost the passenger to freighter market growth in the rest of the world.

KEY INDUSTRY PLAYERS

Increasing Production Capacity for Passenger to Freighter Owing to the Surge in Demand to Drive Market Growth

The competitive landscape of the market shows the dominance of select players such as Aeronautical Engineers Inc., Airbus, Elbe Flugzeugwerke GmbH, and others. These companies focus on the design and development of P2F conversions to drive market growth. Moreover, due to the strong demand to convert freighters, the key players are focused on gaining certifications and approvals by EASA, FAA to enhance the P2F aircraft conversion capacity by various aircraft model types. For instance, in March 2022, Embraer launched a freighter conversion program for E-190 and E-195 jets with São José dos Campos, a Brazil-based company.

LIST OF KEY COMPANIES PROFILED:

• AerCap (Ireland)


• Aeronautical Engineers, Inc. (U.S.)


•  Airbus SE (Netherlands)


•  Boeing Company (U.S.)


• Bombardier, Inc. (Canada)


• Elbe Flugzeugwerke GmbH (Germany)


• Embraer SA (Brazil)


• HAECO Group (Hong Kong)


• Precision Aircraft Solutions (U.S.)


• ST Engineering (Singapore)

KEY INDUSTRY DEVELOPMENTS:

• February 2022 - ST Engineering announced that its business had signed an agreement to lease up to five Airbus A320 P2F aircraft to Vaayu Group (Vaayu). Astral Aviation, one of the world’s fastest-growing all-cargo airlines based in Nairobi, Kenya, will be the launch operator for the first two of the five A320P2F aircraft by sub-leasing them from Vaayu.


• February 2022 - Boeing and ST Engineering announced that they are planning to create a new 767-300 Boeing Converted Freighter (BCF) line at the facility in Guangzhou.


• September 2022 – Boeing delivered the 100th contracted 737-800 Boeing Converted Freighter (BCF) to AerCap, one of the world's largest lessors. The 100th 737-800BCF was converted at Boeing Shanghai Aviation Services (BSAS), home to the first 737-800BCF conversion line.


• February 2021 - Aero Capital Solutions awarded a contract to Aeronautical Engineers Inc. to convert 10 Boeing 787-800 into freighter. This contract is the largest single order to AEI.


• April 2021 - GA Telesis LLC has awarded a contract with additional four orders of 737-800SF freighter conversions with Aeronautical Engineers, Inc. The first contract was for two passenger to freighter conversions, which were completed in March and delivered to Ethiopian airlines. 

REPORT COVERAGE

The report provides a detailed information of the market and focuses on aspects such as build type, aircraft model, fitment, and key players. Additionally, the report provides information on passenger to freighter trends, competitive landscape, market competition, product pricing, and market conditions. In addition to the factors mentioned above, it includes several factors that have been contributing to the global market sizing in recent years.

Report Scope & Segmentation

ATTRIBUTE	DETAILS
Study Period	2018-2029
Base Year	2021
Estimated Year	2022
Forecast Period	2022-2029
Historical Period	2018-2020
Unit	Value (USD Billion)
Segmentation	By Build Type, Aircraft Model, Fitment, and Geography
By Build Type New Build Refurbished
By Aircraft Model Narrow Body Wide Body Regional Jets
	By Fitment Slot/Retro Fitment Line Fitment
	By Geography North America Europe Asia Pacific Middle East Rest of the World
	North America (By Build Type, Aircraft Model, Fitment, and Country)  U.S. (By Fitment) Canada (By Fitment) Europe (By Build Type, Aircraft Model, Fitment, Country) U.K. (By Fitment) Germany (By Fitment) France (By Fitment) Russia (By Fitment) Rest of Europe (By Fitment) Asia Pacific (By Build Type, Aircraft Model, Fitment, Country) China (By Fitment) India (By Fitment) Japan (By Fitment) South Korea (By Fitment) Rest of Asia Pacific (By Fitment) Middle East (By Build Type, Aircraft Model, Fitment, and Country) Saudi Arabia (By Fitment) UAE (By Fitment) Rest of the World (By Build Type, Aircraft Model, Fitment, and Sub-Region) Latin America (By Fitment) Africa (By Fitment)