Airbus 'Future and Evolution of ATSG': A Look Into A330 Conversion

In August, Air Transport Services Group (ATSG) announced plans to purchase and convert 20 passenger Airbus 330s to lease to its express delivery operators. Germany-based aerospace manufacturer EFW won the contract and will begin those conversions in July 2023. 

At first glance, ATSG's deeper investment in the Airbus family is a simple story of modernization as the A330's medium widebody presents a fine alternative to the Boeing 767-300, which only has a limited amount of feedstock availability.

"We're certainly not abandoning the 767," said Mike Berger, ATSG's chief commercial officer. "We still have 30-plus conversion slots left to deliver a 767, but feedstock becomes thinner and thinner. The A330 was just the natural progression, as feedstock availability is excellent and it complements well with our joint venture with Precision on the A321 narrowbody freighter but provides cockpit commonality with the widebody A330 conversion. The A330 offers more capacity than the Boeing 767-300 with 26 main deck and 32 lower deck positions, fully containerized."

An additional merit of the A330: its fly-by-wire cockpit, which allows pilots to easily transition between the A330 and A321. The cockpit commonality between the two Airbus models offers a huge advantage over the Boeing aircraft family, said Wolfgang Schmid, vice president of sales and marketing at EFW. Another advantage of the Airbus conversion is its power cargo-loading system.

"From the loading perspective, the A330 has a nose-down structure, so manual loaders would have had to haul cargo uphill. So we decided to use a powered cargo-loading system," said Schmid. "We had concerns about the motors breaking or being inflexible in terms of speed, but the new system we implemented is quite the opposite."

If a part of the powered system does go down, the other part may take over, allowing the operation to proceed. Additionally, the power cargo-loading system is actually faster than manually loading, as two to four containers are getting moved at once. There also are savings in labor, accidents and mishandled containers since only two loaders are needed on the upper deck, as opposed to six or eight.  

DHL was the first specialty aggregator to fly the A330, and as a long-trusted customer, ATSG has been relying on DHL's data and knowledge of the aircraft's efficiency, operating costs and engine performance as it prepares for its own fleet. According to Schmid, the A330 is meeting the market at just the right time. 

"This is perfect for e-commerce," Schmid said. "We would have had a very hard time 10 years ago if we went to market with this aircraft because everybody was only looking at payload. In the meantime we found out that we can go up to 63 tons on the A330, which would now even be a good payload also for heavy freight."

For decades, major integrators relied on international passenger belly freight to move cargo, but COVID-19 nearly dried up that capacity, creating yet another factor motivating ATSG's investment in the A330: the surge in freighter demand after the dramatic decrease of international passenger flights. 

"Eliminating the cargo capacity of the international passenger airplanes has pushed freighter demand," said Berger. "There will only be a certain period of time that customers will accept the excuse of a global pandemic for why it's still taking five or six days to get the package from Chicago to Istanbul. It's supposed to be there in a guaranteed two or three days. Now everyone wants freighters because they can control the schedule."

ATSG's business was not inflated by COVID-19, as it books its business years in advance. 2023 is nearly booked at 90%. Therefore, it's set up nicely to invest resources in the A330 for its customers. July 2023, however, was the earliest slot ATSG could secure at EFW.

"EFW is booking out into 2026, which gives you a perspective of the overall market," said Berger. "The feedstock demand also drives the passenger aircraft retirements, which become excellent candidates for converted air freighters."

EFW's current lead time for freighter conversion is approximately seven months, but Schmid hopes to decrease that to four and a half months once parts availability isn't hindered by supply chain issues and engineer labor shortages. By 2024, EFW hopes to increase its conversion production to 30 widebody aircraft a year. 

When ATSG completes the conversion, it will control up to 70% of the A330 capacity. Berger calls Airbus products "the future and evolution of ATSG." Integrators will use A321s for shorter flights and A330s for the longer ones.

"We really view ourselves as an enabler to e-commerce and the facilitation of goods and transportation around the world," said Berger. "The Airbus products, specifically from a transportation and maintenance perspective, are very popular in Europe. That's good news for us as we expand globally. We are looking forward to making some major announcements about new customers that will utilize our Airbus converted freighter capacity."