Alaska Airlines is converting two more Boeing jets into freighters to capitalize on the air cargo boom

Alaska Airlines employee Jeff Ferguson loads cargo at Ted Stevens Anchorage International Airport in Anchorage, Alaska.

Markus Thiessen AP

Alaska Airlines is turning two of its mid-life Boeing 737-800s into cargo planes, a bet that the pandemic boom in air cargo will continue to generate revenue even as more passengers travel again.

The Seattle-based airline, the fifth largest in the country, already has three smaller Boeing 737-700s dedicated solely to air cargo. It’s a small number for an airline whose mainline fleet was 217 aircraft at the end of 2021, but the pandemic has made cargo more important for airlines.

Covid has forced passenger airlines to cut flights and reduced belly space on planes around the world that would normally carry everything from live animals, packages, produce and medicines. That pushed up demand – and prices – for air freight.

Alaska has issued a call for proposals to convert the two planes to air cargo and has not yet committed to a supplier. Expansion of its cargo fleet could go beyond the two planes, but it hasn’t committed to adding more just yet.

“I don’t think the magic number is two,” Adam Drouhard, the airline’s cargo managing director, told CNBC.

The new aircraft will only serve destinations in the state of Alaska.

Companies like Boeing have added capacity to convert more passenger planes into cargo planes to capitalize on this trend.

Cargo analyst Stephen Fortune said converting a passenger plane into a freighter, which involves ripping out passenger seats and overhead bins, reinforcing the plane floor and cutting a cargo door for easier loading, can cost around $5 million.

Alaska first introduced converted 737-700s in 2017, but Drouhard said he expects expansion beyond the two planes will be easier than the conversions five years ago because it’s not an entirely new program: 737-800- Conversion lines are already available.

“It’s not going to be that big of an increase if you do one every eight to 10 years,” he said.

In 2021, 101 passenger aircraft were converted to cargo aircraft, up from 59 in 2019 and 71 in 2020, according to IBA Insight.

Most other U.S. passenger airlines don’t operate standalone cargo planes, but have benefited from increased cargo demand during the pandemic. Some airlines flew passenger planes with empty seats and full cargo bellies as travel demand slumped in 2020.

United Airlines, which operates most of the US airlines’ long-haul international flights, brought in $2.35 billion in freight revenue last year, up more than 42% from 2020 and double the 2019 figure before Covid hit. Air freight accounted for nearly 10% of sales last year, compared to 3% pre-Covid.

Low-cost and leisure-focused airline Sun Country began flying cargo for Amazon on cargo planes for the e-commerce giant’s air unit in 2020, a plan it hatched in 2019 but accelerated during the pandemic.

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