Etihad Engineering and Israel Aerospace Industries in aircraft conversion tie-up

Etihad Airways' engineering unit has signed an agreement with Israel Aerospace Industries, or IAI, to set up a site in Abu Dhabi that will convert Boeing 777-300ER passenger planes into freighters as air cargo demand strengthens worldwide.

The new site, where Etihad Engineering will provide two conversion lines that accommodate several aircraft conversions a year, aims to meet growing demand for wide-body freighter jets with long-haul capacity, the company said on Wednesday.

“The Boeing 777-300ERSF is not only extremely attractive to customers but a technological breakthrough, given that it is the first in its size category to offer extensive cargo solutions," said Tony Douglas, group chief executive of Etihad Aviation Group.

"Not only do we see the demand but we view it as a greener, more profitable, highly innovative solution for our airline customers, and an excellent way to drive value for our business.”

Air freight has been a rare bright spot for the global aviation industry during the Covid-19 pandemic, which forced airlines globally to ground their fleets, lay off staff and seek government bailouts.

Cargo revenue has been a lifeline for many airlines facing travel restrictions and more virulent Covid-19 strains that have affected international passenger traffic.

Global demand for air cargo grew 8 per cent in the first half of 2021, above pre-crisis levels, making it the strongest half-year growth since 2017, when the industry posted a year-on-year growth of 10.2 per cent, according to the International Air Transport Association, the airline lobby group.

Boeing 777-300ER jets are used by airlines on long-haul routes.

The new partnership comes a year after the UAE and Israel agreed to normalise relations.

"The agreement we signed adds a significant tier to the relations between Israel and the Gulf states," said Yossi Melamed, executive vice president and general manager of the IAI Aviation Group.

"I have no doubt, following this agreement, additional agreements with companies in the region will arrive and they will economically benefit the sides involved."