Today IAI in Israel announced an agreement with Etihad, to create a facility in Abu Dhabi that will convert passenger aircraft to freighters.
Last summer, we saw Israel and several of its neighbouring States sign a number of trade and other agreements. The pandemic overwhelmed most news coverage in 2020, but this was a big one. The agreements included commercial flights between these countries, as well as overflight agreements. These developments changed the shape of international relationships in the region. And they had some environmental benefits, as a bonus.
But this wasn’t all. For instance, we saw Israir sign an agreement with Etihad, for pilot training in Abu Dhabi. And now State-owned IAI (Israeli Aviation Industries) will partner with Etihad, to make freighter conversions in Abu Dhabi. IAI’s cosignatory is Etihad Engineering, the airline’s MRO (Maintenance, Repair, Overhaul) centre.
More specifically, the new site will busy itself with Boeing 777-300ER conversions. As we have seen, this is a project that the Israeli company is now busy developing. So Etihad seems to be partnering IAI in what could become a promising venture. And it appears that this is the sort of venture that Etihad is interested in.
IAI Building On Etihad MRO Investment
The Abu Dhabi-based airline has been expanding its activities for some time, well beyond its airline operations. They already have agreements with 40 other airlines, for pilot training, at their Etihad Aviation Training Zayed Campus. Their new agreement with IAI now suggests that Etihad is pursuing a similar role for its MRO facilities. Etihad already has the biggest MRO centre in the middle east.
Tony Douglas, CEO of Etihad Aviation Group, had this to say, about their new partnership with IAI:
“Not only do we see the demand, but we view it as a greener, more profitable, highly innovative solution for our airline customers, and an excellent way to drive value for our business.”
IAI is adding the 777 to its already impressive list of passenger-to-freighter conversions. The company already has programs for the 737, 747 and 767. Conversions of the latter have been in particularly high demand in the last decade. And they are still going strong. IAI recently agreed to open another 767 conversion line, as a joint venture with Ethiopian Airlines.
Next came IAI’s 737NG conversions, a very timely project, given the increasing availability of the type in the second-hand market. The 777-300ER and 777-200LR conversions will tackle the upper end of the market, replacing 747 conversions. Before this agreement with Etihad, IAI signed a similar deal with MRO firm Sharp Technics, in Korea.
Etihad’s Own Freight Needs – A Factor?
Beyond its passenger operations, Etihad also has five freighter aircraft – all of them 777F models. They also have 19 passenger 777-300ERs. We don’t know if Etihad itself wants to increase its cargo capacity with more freighters, through its partnership with IAI.
But we do know that Etihad have orders for six 777-9 aircraft, that will partly replace their 777-300ERs. So the older jets could other join their freighter operations, or be sold as freighters, to others. Etihad have gotten three of their 777-300ERs from lessors, but they appear to own the rest (16) outright.
We have seen that the 777-300ER platform is a departure in itself, as far as freight operations go. The “stock” Boeing 777F is using the 777-200LR airframe. And while IAI (and presumably, Etihad) will offer conversions for this model, too, the -300ER variant has more volume. But it can’t carry [much] more weight than the smaller version. However, e-commerce markets actually need more volume than before.
So despite being conversions, these aircraft could well be in high demand, for some time to come. New regulations for emissions mean that some airlines will prefer even newer aircraft. But IAI and Etihad could attract operators using older, less-efficient types (e.g. 747 conversions) with the 777-300ERSF. Lessor GECAS is IAI’s launch partner for this project, allowing with launch cargo operator Kalitta Air.