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Boeing to Add Three New Air Freighter Conversion Lines

Boeing will open three new air freighter conversion lines, one in London and the other two in Kelowna, British Columbia, Canada.

Boeing  (BA) - Get Boeing Company Report plans to open three new air freighter conversion lines for its 737-800BCF aircraft in North America and Europe over the next two years to meet increased global demand for air cargo transport.

The company, in a Sunday statement, said that it also signed a firm order with Icelease for 11 freighters as the launch customer for one of the of the new conversion lines.

"Building a diverse and global network of conversion facilities is critical to supporting our customers' growth and meeting regional demand," Jens Steinhagen, director of Boeing Converted Freighters, said in a statement. "KF Aerospace and our Boeing teammates at London Gatwick have the infrastructure, capabilities and expertise required to deliver market-leading Boeing Converted Freighters to our customers."

The company said it will open one conversion line in 2022 at Boeing's London Gatwick Maintenance, Repair & Overhaul facility, its state-of-the-art hangar in the U.K., and two conversion lines in 2023 at KF Aerospace MRO in Kelowna, British Columbia, Canada.

"We're very excited to be expanding our relationship with Boeing," Gregg Evjen, chief operating officer of KF Aerospace, said in a statement. "We've been working with the Boeing product line for more than 30 years. With our cargo conversion experience, our highly skilled workforce and all the technical requirements already in place, we're ready to get to work and help serve Boeing's customers." 

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Boeing forecasts that it will need to convert 1,720 passenger jets to air freighters over the next 20 years to meet air cargo demand. Of those, 1,200 will be standard-body conversions, with nearly 20% of that demand coming from European carriers, and 30% coming from North America and Latin America.

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Boeing announced earlier this year that it would create additional 737-800BCF conversion capacity at several sites, including a third conversion line at Guangzhou Aircraft Maintenance Engineering Company Limited, and two conversion lines in 2022 with a new supplier, Cooperativa Autogestionaria de Servicios Aeroindustriales in Costa Rica. Once the new lines become active, Boeing will have conversion sites in North America, Asia and Europe.

The 737-800BCF is Boeing's standard body freighter market leader with more than 200 orders and commitments from 19 customers, according to the statement. The 737-800BCF offers higher reliability, lower fuel consumption, lower operating costs per trip and world-class in-service technical support compared to other standard-body freighters.

Shares of Boeing on Friday rose 0.15% to $221.30 in after-hours trading. The stock had closed 0.7% higher in the regular session.