Israel Aircraft Industries (IAI) and Etihad Engineering have agreed to partner on two new Passenger to Freighter (P2F) conversion lines for Boeing 777-300ERs in Abu Dhabi as demand for cargo capacity continues to surge amid the Covid-19 pandemic. The partners expect the lines to open in 2023.

In 2019, IAI and GE Capital Aviation Services (Gecas) announced the launch of the Boeing 777-300ERSF, a program that established a P2F conversion dubbed “The Big Twin,” denoting its status as the largest-ever twin-engine freighter. The move appears prescient given the circumstances surrounding a shortage of cargo capacity during the Covid crisis.

Cargo operations have offset airline losses due to the pandemic, as a lack of belly capacity resulting from the reduction in passenger flights and increasing demand in the express package delivery segment has resulted in a need for more dedicated freighters. Meanwhile, the pandemic has led to the accelerated retirement of aging airplanes, adding to feedstock for freighter conversions.

As a result, IAI and others have become more active in the P2F conversion business; just last week IAI signed an agreement with Ethiopian Airlines to establish a conversion site for Boeing 767-300s in Addis Ababa. The new passenger-to-freighter conversion center will join existing conversion sites IAI operates at its campus in Ben Gurion International Airport and in Mexico.

IAI’s opportunities for expansion in the sector grew with the August 2020 signing of the Abraham Accords, which normalized economic and political relations between Israel and the United Arab Emirates and Bahrain.

“The Abraham Accords have enabled us to meet [Etihad’s] managers firsthand, to see their ability and dedication, in addition to witnessing the company’s great capabilities in the field of jet maintenance,” said IAI Group executive vice president and general manager Yossi Melamed. “The agreement we signed adds a significant tier to the relations between Israel and the Gulf States. I have no doubt following this agreement, additional agreements with companies in the region will arrive, and they will economically benefit the sides involved.”