Press Release

Contact: Bill Dane, Senior Aerospace Analyst

Phone: (203) 426-0800

Fax: (203) 426-4262

Web site: www.forecast1.com

E-mail: bill.dane@forecast1.com

Forecast International, Inc.

22 Commerce Rd. Newtown, CT  06470 USA

 

FOR IMMEDIATE RELEASE

 

Cargo Conversions Pacing Lucrative Military/Civil Transport Upgrades

PARIS, [June 15, 2003] —  A new Forecast International/DMS study of The Commercial and Military Transport Retrofit & Modernization Market – 2003-2012 is projecting increasing opportunities for companies involved in cargo conversions, electronics/avionics retrofits, and aerial refueling modifications. The total 10-year market for these upgrades is conservatively estimated at $24 billion.

The worldwide air cargo fleet is primarily comprised of pre-owned passenger-configured transports which have been converted for the freighter role. This fleet is entering a re-equipment cycle as many 727, DC-8, 707 and early model 737 and 747 aircraft are being parked in the desert and most of these are expected to be replaced by larger aircraft. Conversion programs for four Boeing models – 737-300/400, 747-400, 757-200, and the 767 – are gearing up or are about to be launched and new players are vying for the work.

"Start-up firms such as Precision Conversions, Aeronautical Engineers, and Structural Integrity Engineering have thrown their hats in the ring and Boeing may be hard pressed to match the competitive conversion costs of some of the newcomers," said Forecast International senior aerospace analyst Bill Dane. The 10-year cargo conversion market is estimated at $14.5 billion.

A recent FAA mandate will require installation of traffic alert and collision avoidance systems (TCAS II) aboard nearly all U.S.-registered freighters by the end of 2004. Approximately 800 aircraft will be affected by the decree, although some U.S. cargo operators had already begun the installations.

The military also makes use of modified airliners for some of its specialized missions. According to Dane, "perhaps the most visible example of this is the U.S. Air Force plan to lease 100 Boeing 767 commercial transports, suitably modified for the aerial tanker role. " These will be new production aircraft, however, and fall beyond the scope of the new study. The 767 has already been selected by several overseas air forces to fill Tanker Transport and Airborne Warning and Control System (AWACS) requirements, and modified ex-British Airways 767s are in the running for a 20-aircraft U.K. aerial tanker requirement.

The U.S. Air Force and many overseas air arms will be carrying out electronics/avionics upgrades to their transport fleets in the coming years, primarily to update the onboard navigation systems.  Perhaps the most lucrative program will be the U.S. Air Force's Global Air Traffic Management (GATM) upgrades for its C-130s, KC-135s, and KC-10s, expected to account for more than $1 billion in funding through 2012.

Defensive Electronic Warfare (EW) system upgrades and retrofits to military transports is another growing market. In the United States alone, 130 transports will be fitted with the new large aircraft IR countermeasures (LAIRCM) system in a program valued at about $1 billion.

Overall, this is a significant market and one which will continue to provide opportunities for participants able to offer solutions combining a rational balance of cost versus capability.

Forecast International/DMS Inc., is a leading provider of Market Intelligence and Analyses in the areas of aerospace, defense, power systems and military electronics.  Based in Newtown, CT, USA, Forecast International specializes in long-range industry forecasts and innovative marketing presentations, including regular 10-year forecasts.  To arrange an interview with Forecast International's analysts, please contact Monty Nebinger (203-426-0800, monty.nebinger@forecast1.com).