DHL Express said Thursday it has ordered nine used Boeing 777 passenger jets that will be converted to dedicated cargo jets by startup engineering firm Mammoth Freighters, becoming the first major integrator that has stepped up to an aftermarket 777.
The large freighters will replace older Boeing 747 freighters in the DHL fleet. The first 777-200 Long Range aircraft is expected to be delivered in 2024, with the remaining aircraft retrofitted and supplied through early 2027.
DHL (DXE: DPW) is buying the aircraft from Jetran, a Horseshoe Bay, Texas-based lessor and reseller of used aircraft, which acquired the aircraft in the secondary market and is placing them with Mammoth Freighters to reconstruct for carrying heavy containers on the main deck.
DHL has been steadily augmenting its widebody fleet with factory-built 777s from Boeing, but the Jetran deal is the first time it has invested in converted freighters for this aircraft type. Since 2018, DHL has purchased 28 new 777-200s from Boeing, with 18 of them now in service. The rest of the order will continue to be supplied into 2025. The 777 forms the backbone of DHL’s intercontinental air network, in which DHL Express operates more than 300 dedicated aircraft with 18 partner airlines on over 2,400 daily flights around the world.
The express delivery giant said the new planes will replace 747-400s. DHL Aviation has three of the aircraft in the fleet, ranging in age from 21 to 33 years old, according to flight tracking site Flightradar24. It also operates six 747-8s that are only about 10 years old. Michigan-based Kalitta Air also operates some 747-400s on behalf of DHL, which could place the converted 777s with its partner.
“Ordering converted freighters with a shorter useful life provides an efficient bridge between current and new airframe technologies, such as new generation wide-body freighters B777-8F and A350F,” DHL said in a statement.
Boeing and Airbus are in final development phases for the 777-8 and A350 freighters, respectively. Airbus says it will begin production sometime in 2025, with Boeing following a year or two afterward.
Acquiring a used aircraft and stripping it of passenger features and installing a wide cargo door, reinforced flooring and wingboxes, rigid cockpit barrier, and container handling system is significantly cheaper than buying a new cargo jet.
The DHL investment comes during a downturn in air cargo traffic that recently pushed FedEx Express cut back flight activity and scale back plans for new aircraft purchases. FedEx also operates factory-built 777s, but DHL is the first integrated parcel carrier to opt for the aftermarket version.
The Mammoth Freighters design offers similar features as the production freighter, with a payload capacity of 116 tons and a range of 5,700 miles. The twin-engine aircraft is 18% more fuel efficient and more reliable than the quad-engine 747-400.
“With the modernization of our intercontinental fleet, we can simultaneously enhance our proven ability to meet growing demand, improve our environmental footprint and deliver best quality service to our customers,” said Robert Hyslop, executive vice president global aviation at DHL Express.
Mammoth Freighters and Israel Aerospace Industries (IAI) are rushing to produce the first 777 passenger-to-freighter conversions. Mammoth, established in 2021, is backed by Fortress Investment Group. It has a large maintenance hangar in Fort Worth, Texas, where conversions will take place, as well as a licensed contractor in the United Kingdom.
The startup aerospace company will convert both 777-200 and 777-300 aircraft. It has 35 firm orders so far, including six from AviaAm Leasing, four from Canadian all-cargo operator and DHL contractor Cargojet, and 16 from undisclosed customers.
Officials say they hope to secure Federal Aviation Administration certification for the 777-200 early next year and push the first aircraft to AviaAm Leasing soon after.
“We’re looking forward to having DHL prove the caliber and quality of our product,” said Brian McCarthy, Mammoth’s vice president of marketing and sales.
IAI this week announced plans to establish another production line in South Korea weeks after completing the first flight test of its prototype in March. Kalitta Air has signed leases with AerCap (NYSE: AER) for three 777-300 freighters produced by IAI, which says it expects U.S. and Israeli aviation authorities to certify its structural modifications this year.
The air cargo sector has been in a freight recession for the past year, with volumes down more than 10% year over year. The torrid pace of cargo conversions in the past three years, when supply chain disruptions triggered by the pandemic placed a premium on air transport, has raised some fears of oversupply. The concern is mostly aimed at standard, short- and medium-haul aircraft like the Boeing 737-800.
A limited number of large widebody freighters are being produced after Boeing closed its 747 production line in January, and Boeing will have to stop producing the legacy 767 and 777 aircraft at the end of 2027 to comply with global emissions requirements. Cargo operators are mostly looking to the converted 777s to replace 747-400s and older MD-11 and DC-10 cargo jets.
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