SYDNEY (Reuters) - Airbus and Singapore's ST Engineering said they would set up new sites in China, Germany and the United States by 2023 to convert A321 passenger planes to freighters after the first one entered service with Qantas Airways Ltd <QAN.AX> on Tuesday.
The Elbe Flugzeugwerke GmbH (EFW) joint venture between Airbus SE <AIR.PA> and Singapore Technologies Engineering Ltd <STEG.SI> will expand beyond Singapore allowing it to convert around 25 planes each year to meet rising demand for dedicated cargo aircraft, they said in a statement.
About half of the air cargo carried worldwide normally flies in the belly of passenger jets rather than in dedicated freighters. But pandemic-related flight cuts due to weak travel demand have squeezed air freight capacity.
"The completion of our first A321P2F is timely, as the programme can help airlines breathe new life into underutilised aircraft, which would otherwise suffer a harder landing in their residual value," said Jeffrey Lam, president of ST Engineering's aerospace division.
Advisory firm Ishka says the market value of a 10-year-old A321 passenger plane has fallen by 16% to $21.5 million since January, while the monthly lease rate is down 33%.
The first A321 converted freighter is operated by Qantas on behalf of Australia Post and includes a large main cargo door which is hydraulically actuated and electrically locked, the joint venture said.
(Reporting by Jamie Freed; editing by Jason Neely)