Boeing is establishing its eighth production line for converting Boeing 737-800 passenger aircraft to freighters after agreeing with Amman, Jordan-based maintenance and repair company Joramco to carry out the aftermarket work. 

Joramco, a subsidiary of service company Dubai Aerospace Enterprise, is the first site in the Middle East to support Boeing’s 737-800 conversion program. It will reconfigure used aircraft for customers in the Middle East, Europe, North Africa and the Commonwealth of Independent States. Dubai Aerospace Enterprise has a leasing company with 550 aircraft, including 140 of the 737 family. Tuesday’s announcement suggested that DAE Capital would utilize Joramco to overhaul some of its own 737s for dedicated cargo business.

Joramco has expanded to occupy five hangars with 22 maintenance lines by the end of 2024. 

“We continue to look for opportunities to bring freighter conversion capacity closer to our customers,” said Mike Doellefeld, Boeing’s vice president of engineering services, converted freighters and subcomponents, in the news release. 

Boeing did not provide details about the Joramco supplier relationship, such as when the new production line will be ready to begin work and any initial orders that will be sent to Amman. It typically takes more than a year for Boeing (NYSE: BA) partners to set up a hangar for conversion, acquire the necessary technology and tooling, and train staff. 

The expansion of Boeing’s conversion program comes in the middle of a serious downturn in air cargo volumes that has resulted in a sharp reduction in orders for converted freighters by lessors and all-cargo operators. During the pandemic, when air cargo capacity was at a premium, passenger-to-freighter conversions were the rage. Rising values of narrowbody aircraft at a time when manufacturers are having difficulty meeting commitments for factory-built planes is also discouraging investment in conversions. 

But Boeing’s outlook sees a need for 1,300 standard-size freighter conversions, such as the 737-800 and Airbus A321, by 2040. Boeing has delivered more than 130 converted 737-800s, with a backlog of 120 orders and commitments. In March, Boeing announced plans to activate a 737-800 production line in India.