Eastern Airlines makes an unrivaled bet on continued cargo growth

Eastern Airlines is making a bet — a very big bet — that the seemingly insatiable demand for package freight is here to stay and will only grow. The Wayne, Pa.-based airline’s bet is to the tune of 35 Boeing 777 passenger-to-freighter conversions, expected to join its fleet in the next few weeks. The carrier has taken delivery of 10 of the 35 aircraft and expects the next 25 to be delivered in the next 8-12 weeks, CEO Steve Harfst said. The passenger 777s will be converted in-house at Eastern’s wholly owned maintenance facility, FMS, based at the Kansas City International Airport. Each conversion is expected to take about two weeks. Harfst declined to disclose the terms of the deal, but said Eastern bought the aircraft directly from airlines downsizing the widebodies from their fleets. Values for used 777s vary, and the widebody’s value has taken a hit as airlines retire their larger aircraft in response to the Covid-19 pandemic. But even at the low end, if Eastern paid less than $10m per aircraft — a price Delta is reported to have paid for a used 777 in 2016 — its deal would be worth $350m or, more likely, even more. Harfst said the deal has been fully financed by the privately held company’s investors but declined to elaborate. Eastern is putting its chips squarely on package freight. <br/>