IAI’s Bedek Reaches Agreement with Boeing Over Conversions

AIN Air Transport Perspective » October 21, 2013
IAI’s Bedek division anticipates a recovery in demand for converting Boeing 767 passenger airliners into freighters. (Photo: Israel Aerospace Industries)
October 21, 2013, 10:15 AM

Israel Aerospace Industries (IAI) has signed a licensing agreement with Boeing covering modifications of 767 and 747 airliners by its Bedek Aircraft Group division. The agreement, announced on October 15, means that Boeing will provide support for aircraft converted by Bedek without charging operators an annual fee, ending a policy introduced by the U.S. airframer in 2009. It will cover 72 of Bedek’s earlier BDSF767-200/300 modifications and 29 BDSF747-400s–most of which involve passenger-to-freighter conversions–as well as all future projects. BDSF is Bedek’s own designation for the Boeing aircraft that it converts.

Boeing and Bedek compete directly in the freighter conversion market, and the Israeli company holds its own STC for the modification. According to Bedek deputy marketing vice president Jack Gaber, the IAI subsidiary opted to reach a licensing agreement with Boeing to avoid any inconvenience for its clients in operating the modified aircraft by ensuring that they continue to benefit from Boeing product support. Bedek covers its modification work, which includes a new cargo door, a new strengthened floor and various surrounding structures, under its own warranty.

The market for freighter conversions has weakened since early last year, following a strong recovery from the downturn sparked by the recent global financial crisis. Somewhat paradoxically, explained Gaber, the prices of 767s and 747s available for conversion have remained higher–despite soft demand–in part due to delivery delays involving Boeing’s new 787 widebody. But Bedek now anticipates greater availability of suitable airframes in 2015 and 2016 as passenger airline fleet renewal accelerates. The company also has reported an increase in demand for freighter conversions in recent months, much of it focused on 767 modifications. Since 2010, Bedek has held a Boeing license for converting 737-300/400s into freighters. The new agreement for 767s and 747s also covers other modification projects, such as the installation of executive cabins.

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