I agree the 747-8 freighter's days are numbered. I agree with you that UPS have all they need/want, but Boeing could still scrounge up a few more orders from existing 747-8F customers for while air cargo traffic is flat-to-mildly declining, the players with the most modern fleets appear to be the ones securing new business at the expense of those with older, less efficient fleets. But I expect the line will be fully closed down no later than the end of the 2020s.
The 777-300ER wingspan is a fair bit larger than the MD-11F so a significant fleet conversion would require FedEx and/or UPS to revamp their infrastructure to accommodate them.
We agree in principle that other airlines will buy 748F. The question becomes how many and when? If earlier, than I am Mr. Doom and Gloom. But if Boeing isn't able to secure near term orders, than the 747 goes out of production and that is that.
I personally believe this conversion dramatically helps keep 77Ws in use and has a clear and significant market of 200 to 300 over the next 17 years
Where we can argue there will be 200-300 orders for the aircraft, I think these orders will come at the back end of the 2020's or early 2030's.
Availability of feed stock, price of feedstock, near term global economics are all factors that will dictate the near term success of the program.
If we refer to the GECAS press release, the economics of the program is based upon on using 16 year old aircraft, with the caveat operators who use the aircraft on longer routes (higher utilisation rates) could use 12 year old aircraft as a economically viable alternative.
If we take Emirates out of the equation, there will probably be no more than 2-3 feedstock aircraft coming into the market over the near term.
As such, the 77F and 748F will probably have a viable market up to 2025.
Another consideration revolves around the secondary market for the 777-300ER. We don't have much data to date, other than aircraft coming off lease have quickly found new operators. As such, the market for secondary leases may remain strong over the shorter term.
As such, GECAS could be using this program to help secure long-term secondary leases on their aircraft; help regulate the supply of aircraft in the passenger market (to maintain rates); fulfill the requirements for freighter aircraft from their existing customer base; or more realistically a combination of the above.
Where GECAS have the scale to invest in such a program, other operators of the type may not have the same luxury. For them, parting out of aircraft and the secondary passenger market may be the more viable option.
I see this aircraft coming into its own element post 2027.
From the OP link, EIS of this 777-300ERSF in 2022.
My estimates of 77W resale value is much lower than others. I see a widebody surplus happening and an A330NEO/A350/779/787 price war brewing. This will drive down the resale of used aircraft.
Parting out is worth, at most $30 million per 77W, probably down closer to $25 million. Current minimum value is $55. If one could buy a 77W for $25 million and put a mere $40 million into it for a 777-300-ERSF, of course these would fly off the shelf.
I wouldn't ignore Emirates, for EK, CX, or SQ. These airlines with a business model of rapid aircraft replacement will represent a disproportionate sum of the aircraft to be converted.
I believe the widebody market is in oversupply. This means less desirable frames will have to be discounted or will be unable to find a home. I do not expect, in 4 years, there to be a plenty of frames.
Remember how the A330 conversion was held until aircraft resale values plummeted.m? First on the A332, than A333:viewtopic.php?p=8839521
Once 779 deliveries are in full swing, probably early 2022, we'll see those 77Ws returned to leasors in volume. You are correct in that few have been available so far. GECAS is willing to invest and provide 15 frames. So the program is launched, I think they have read the tea leaves and see the future 77W glut. Since this happens at every generation change (A35K and 779, as well as fragmentation by 787 and A359). The market pressure coming is obvious. Airframes out of production are notorious for losing resale value. This is why freight conversions exist.
I see a healthy pax 77W secondary market. I just do not see the values being high enough to stop half of the 2023+ offered 77Ws grom being converted. We already now low value is $55 million USD.
First delivery was 2004. That means the first few years of production will have too many hours or cycles to justify this expensive conversion. This conversion is just in time for 2007-2009 deliveries.
I see conversions far exceeding 200. But that is based on my opinion of e-commerce growth.
Who predicted the current 767SF/BCF mania?
168 787s per year
The resale value of the 77Ws will drop. That is an easy prediction. The lack of A35K and 777x sales as well as the impending end of A380 production indicate the era of VLAs such as the 77W is at an end in the PAX market. I write with sadness as I'm a huge 779 fan. Cest la vie.
I cannot wait to get vaccinated to live again! Warning: I simulated that it takes 50%+ vaccinated to protect the vaccinated and 75%+ vaccinated to protect the vac-hesitant.