Posts: 700
Joined: Wed Sep 27, 2000 6:33 pm

21m USD For A B747-400

Thu Nov 29, 2001 5:54 pm

From THAI website (press releases)

8. Purchase of Boeing 747-400 from Leasing Company

THAI’s Board has approved the purchase of the second Boeing aircraft 747-400 from aircraft leasing company Emerald Wing Company Limited once the current agreement has expired on 22 March 2002, since the airline still has need for aircraft utilization. The aircraft has been used for 12 years and has an operating life of 20 years. Purchasing the aircraft from the aircraft leasing company will enable THAI to buy the airplane for less than the bid price, at approximately USD 21.15 million dollars.

About as much as a new B717!
Posts: 1398
Joined: Thu Feb 03, 2000 3:45 pm

RE: 21m USD For A B747-400

Thu Nov 29, 2001 6:31 pm

Like the article said, Thai has been leasing that particular aircraft for the past 12 years. If you consider all the money that have already been paid to the leasing company over the last 12 years, Thai may not exactly be picking up a bargain.

Posts: 700
Joined: Wed Sep 27, 2000 6:33 pm

RE: 21m USD For A B747-400

Thu Nov 29, 2001 6:50 pm

Think of it this way, if they bought it new 12 years ago for 120m USD, and depreciated it over 20 years, it would be now at 48m USD in their balance sheet.

More likely, the leasing company realised that once the aircraft came off lease, it was going to the desert, so accepted TG offer as being better than nothing. I agree, for the leasing company it may not be a bad deal (they got 12 years of rental, and now get 22m USD, would need to know how much they bought it for and how much the rental was to know if they are ahead or not)

It shows that airlines like UA, which looks to have an OK balance sheet, may not. Because the value of all the aircraft they own is almost certainly not what they think it is.

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