Air Transport Services Group is planning to obtain certification for A321(P2F) converted freighters shortly before the end of the first half of 2020 with a mass conversion programme starting not before late 2021, Chief Executive Joe Hete said during the quarterly earnings call.
"The target is to get the certification, call it, in the latter part of the second quarter of next year. The aircraft, from a conversion standpoint, is down off jacks. It's sitting on its own landing gear. We're still doing some testing, expect to start test flying in the first part of the year going forward," Hete said. "You might get a couple more aircraft into the mix in the latter part of 2020. And from a full production standpoint, I don't see it being a big production line going forward until probably the latter part of 2021 and 2022."
The American cargo holding is "always on the lookout" for passenger A321s available for conversion but Hete admitted that the ongoing grounding of the B737 MAX was causing the availability of second-hand narrowbodies to drop.
Hete pointed out that the type could potentially be used extensively in China on behalf of local e-commerce operators, such as Alibaba.
"I think you have to start looking around the globe to find other opportunities. Certainly, Amazon in Europe could be one. You could get into Asia, for example, but our ability to operate there is pretty limited. But certainly, it would be a potential outlet for leasing aircraft in there, especially when you start talking about something like the A321," Hete said.
On the other hand, he dismissed potential operations for Walmart given the fact that the company has an extensive in-house ground logistics network and practically does not use air transport.
China's largest e-commerce retailer Alibaba has its in-house logistics subsidiary Cainiao but does not operate domestic cargo flights exclusively for its own needs.
ATSG has a close partnership with Amazon.com in the United States. According to the ch-aviation fleets module, ATSG's subsidiaries ABX Air (GB, Wilmington Air Park) and ATI - Air Transport International (8C, Wilmington Air Park) operate fourteen B767-200(F)s and thirteen B767-300Fs on behalf of the e-retailer between them. Under the terms of a deal signed in late 2018, ATSG's total fleet operated on behalf of Amazon.com will reach thirty B767s by the end of 2020.
Amazon currently holds warrants for shares which, if exercised, could lead to the e-commerce giant acquiring a total of up to 39.9% of all shares in ATSG.
