ST Engineering to lease up to 5 converted freighter aircraft to UAE-based Vaayu Group

ST Engineering's S63 commercial aerospace business has agreed to lease up to 5 Airbus A320 passenger-to-freighter (P2F) aircraft to UAE-based Vaayu Group, the company said on Monday (Feb 14).

The A320 P2F aircraft are converted by ST Engineering as part of its joint venture with Airbus - Elbe Flugzeugwerke - to convert passenger aircraft to freighter aircraft.

The first 2 of the 5 aircraft will be sub-leased by Vaayu to Kenya-based all-cargo airline Astral Aviation. Astral Aviation will become the launch operator of the 2 aircraft.

The first aircraft is expected to be placed on lease in the second quarter of 2022, with the remaining 4 freighter aircraft converted and leased progressively. It will also be the world's first A320 P2F to go into operation.

Yip Hin Meng, executive vice-president and head of aviation asset management at ST Engineering, said: "We are excited to welcome Vaayu as our first A320 P2F lessee customer, and for Astral Aviation to be the first airline in the world to operate such a platform."

ST Engineering noted that the converted aircraft are "ideal solutions for express domestic and regional operations". Under Elbe Flugzeugwerke, ST Engineering and Airbus are also converting the A321 passenger aircraft to freighter aircraft.

Astral Aviation's chief executive Sanjeev Gadhia said the freighter aircraft will "add immense value to Astral fleet and network expansion", and result in the company considering future freighter aircraft acquisitions of the A320, A321, A330-300 and A350.

Separately, ST Engineering said it secured additional component maintenance-by-the-hour (MBH) contracts for China Airlines Group's Airbus fleet; it also secured an extension of its component MBH contracts for Jeju Air's Boeing fleet.

The company will provide integrated component support to China Airlines' Airbus A321neo and A330 aircraft, and Tigerair Taiwan's Airbus A320neo aircraft through the new multi-year contracts, which have a duration of between 7 to 12 years.

The new contracts add on to ST Engineering's existing component MBH contract with China Airlines for its Boeing 737-800 aircraft.

As for ST Engineering's contracts with Jeju Air, the extension, which will take effect on Jan 1, 2025, will see the company providing integrated component support to Jeju Air's Boeing 737NG and Boeing 737 Max aircraft till 2030 after the existing contracts expire.

Shares of ST Engineering were trading flat at S$3.86 as at 1.31 pm on Monday.

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