Israeli specialist's Guangzhou-based partner GAMECO to carry out freight modification of 737-300s in third quarter
China Postal Airlines has selected Israel Aircraft Industries (IAI) to convert into freighters at least three Boeing 737-300s now operated by sister company China Southern Airlines.
Chinese industry sources say the first 737-300s will be delivered to new IAI partner Guangzhou Aircraft Maintenance Engineering (GAMECO) in the third quarter and be redelivered to China Postal four to five months later. IAI has signed GAMECO as a subcontractor to install 737 conversion kits for potential Chinese and overseas customers using the IAI supplemental type certificate (STC).
The selection of IAI by China Postal is a blow to Pemco Aviation Group, which earlier converted for GE Capital Aviation Services (GECAS) two 737-300Fs currently operated by China Postal and two 737-300QCs now at China Southern. But sources say these carriers have had operational problems with the Pemco-installed cargo doors and have opted to use IAI for future conversions, a decision GECAS supports.
GECAS declines to comment other than to say it has filed a lawsuit against Pemco alleging breach of contract for six aircraft converted in 2003 and 2004. These include the China Postal and China Southern aircraft, plus two at TNT Airways. Pemco has filed a counter suit.
Sources say GECAS owns at least one of the 737-300s set for conversion and is keen to convert in China aircraft that are Chinese registered. A restriction preventing aircraft that are more than 15 years old from being imported means there is a limited pool of aircraft available for the fast-growing Chinese cargo market and it is in the interest of leasing companies to keep in China aircraft that are already registered there.
Other lessors that own China Southern's 737-300s are also keen to convert their aircraft in China and may lease them to China Postal. Industry sources say China Postal plans to add three 737-300Fs next year to replace its fleet of five Shaanxi Y-8s. The carrier expects to add another 10 freighters, mainly 737-200s, and possibly Boeing 757-200s, from 2006-10. China Southern, which is phasing out its fleet of 30 737-300s in favour of new Airbus A320 and Boeing 737-700 family aircraft, and operates 757s, is the likely source of these aircraft.
China Postal also plans to take over the two 737-300QCs now operated by China Southern, which owns 49% of China Postal.
BRENDAN SOBIE / SINGAPORE
Source: Flight International
