Will Boeing accept 77W trade-ins for 779s? I figured that if Boeing offers 77W trade-ins they can sell more 779s and at the same do more 77WBCF conversions.

For the right price, I doubt they'd say no; and they would be stupid to say no. Again, at the right price for Boeing.

UA857 wrote:

Will Boeing accept 77W trade-ins for 779s? I figured that if Boeing offers 77W trade-ins they can sell more 779s and at the same do more 77WBCF conversions.

Airbus could also do the same to sell more A351s and re-sell the 77Ws for conversion feedstock.

First, Boeing would need to create a 77WBCF program. Currently, only IAI has a 777-300ER P2F program.
Secondly, airlines are trying to offload 77Ws to reduce and optimize fleet size. Selling one airplane for $20M to buy a brand new one at $400M which carries MORE passengers doesn't make a lot of sense.

Tokyo777 wrote:

First, Boeing would need to create a 77WBCF program. Currently, only IAI has a 777-300ER P2F program.
Secondly, airlines are trying to offload 77Ws to reduce and optimize fleet size. Selling one airplane for $20M to buy a brand new one at $400M which carries MORE passengers doesn't make a lot of sense.

Doesn't Boeing still have a leasing arm? They could lease them to smaller outfits or even BBJ them.

Tokyo777 wrote:

First, Boeing would need to create a 77WBCF program. Currently, only IAI has a 777-300ER P2F program.
Secondly, airlines are trying to offload 77Ws to reduce and optimize fleet size. Selling one airplane for $20M to buy a brand new one at $400M which carries MORE passengers doesn't make a lot of sense.

I´m saying that Boeing should offer 77W trade-in deals once the 779 enters production for the same price.

UA857 wrote:

I´m saying that Boeing should offer 77W trade-in deals once the 779 enters production for the same price.

Never is a strong word, but I cannot see any logical reason to do this? Other than to sell new aircraft. Who would shoulder the cost difference between what Boeing paid for the 77W(at 777x) prices and what they could sell them/remarket or scrap them for?
It’s worth remembering that selling aircraft for *more* than an airline paid for them would have significant implications for their financial reports, assuming they have been depreciating their capital investment since delivery.

These kind of trade-in deals happen all the time with all kind of models. There would be nothing special about Boeing taking back several 777-300ERs or any other models as part of a new 777X deal.

Momo1435 wrote:

These kind of trade-in deals happen all the time with all kind of models. There would be nothing special about Boeing taking back several 777-300ERs or any other models as part of a new 777X deal.

That is all true, but we have a completely different situation and cannot infer the past and transfer it to the (near) future.
Hard to imagine if all 777W customers do that. Let's say Emirates insisted on such a deal. Then there would be not just a few but more than 100.
Lufthansa, for example, doesn't have a 777W at all. Would Boeing be ready to trade in the 747-8i or even the A380? I do not think so

Keep in mind that Boeing is a for-profit company. They exist to make money, not push out 777Xs for our enjoyment. With that in mind, consider following:
- Boeing has to remarket the 777s that get traded in. Demand is currently next to nothing, so the price would be really low. Boeing would either be taking a very big loss, or be able to offer a discount of next to nothing on the 777X.
- Boeing makes a lot of money on supporting in-service types. Aftermarket support is a big business. It is in Boeing's interest to keep the old 777s flying where they are.

I have been privy to a deal at another manufacturer that burned its fingers on a trade-in deal like this. At the time it made sense, eventually the market changed and it didn't. Half the aircraft went directly to the scrapper at the manufacturers expense. IMO, now is definitely not the time unless you have something really attractive to trade in like an A320/321neo, A220 or E2.

Boeing Capital and Airbus Financial Services, plus their respective affiliated strategic partners, offer financial packages, including trade in deals.

Boeing has previously traded Airbus aircraft, and vice versa.

Everything has it's price. For some aircraft, when re-sale, storage, insurance and maintenance are factored in, today, may be worth close to zero, or minus. Nimble financiers are relinquishing security, especially floating charges, just in time to avoid liability for these costs.

Boeing will take trades to make 777X sales, maybe even some A380's, especially EA-powered, with GE involvement. Perhaps some deals were even inked pre-Covid, at pre-Covid values, which they are now trying to side step?

oldJoe wrote:

Hard to imagine if all 777W customers do that.

That's a straw man argument. There's no reason it has to be everybody, nor offered for every possible trade-in type. The value of 777-300ERs as stock for freighter conversion is established.

Momo1435 wrote:

These kind of trade-in deals happen all the time with all kind of models. There would be nothing special about Boeing taking back several 777-300ERs or any other models as part of a new 777X deal.

Is that true? My perception is that taking trade-ins is relatively infrequent in the airliner business. My perception is that it seems to happen more often in cases where the deal has strategic value, such as when HA switched from A330 to 787 and Boeing took in some old 767s to facilitate the deal. Maybe that's just my perception and trade-ins are more common and just not commented on as much.

Revelation wrote:

Momo1435 wrote:

These kind of trade-in deals happen all the time with all kind of models. There would be nothing special about Boeing taking back several 777-300ERs or any other models as part of a new 777X deal.

Is that true? My perception is that taking trade-ins is relatively infrequent in the airliner business. My perception is that it seems to happen more often in cases where the deal has strategic value, such as when HA switched from A330 to 787 and Boeing took in some old 767s to facilitate the deal. Maybe that's just my perception and trade-ins are more common and just not commented on as much.

I can only speak from my experience, but these deals seem common, but normally a minority of deals.

Due to the difficulty of selling large aircraft, I expect many deals. This will be done to cold hard numbers.

GE will be part of the equation. They need to maintain GE-90 maintenance revenue. So they will help with 777-300ERSF conversions.

The reality is, no large aircraft will sell well for years. Smart governments will expand airports as part if infrastructure programs allowing for more hub bypass.

Lightsaber

lightsaber wrote:

Smart governments will expand airports as part if infrastructure programs allowing for more hub bypass.

I sure hope so. Last time I made similar comments I got some robust push back. Also I've seen my local airport (MHT) struggle due to over-expansion and loss of revenue during COVID-19, but hopefully the worst of that is behind us. Meanwhile, Seattle Times had a nice article about SEA opening up some of its recently rebuilt facilities. Good on them!

I'm not an insider at all, I just noticed enough news articles over time (not press releases) about deals were trade-ins were mentioned. For example, Boeing Capital currently owns plenty of 77Es which were retired by Singapore Airlines in the last couple of years after SIA placed several large Boeing orders for the 737 MAX, the 777X and the 787-10. You can of course consider this a deal with strategic value, SIA could have easily gone all Airbus after all.

The 777W seems to be an odd variant that seems to have limited value as a trade in and continued use. Boeing might take them to make a deal on new aircraft with some favored customers, but many just might go to scrap.

Boeing will accept anything from Horse carriage to space shuttle if it makes financial sense to them. They already accepted some A340 among other planes

Tokyo777 wrote:

Secondly, airlines are trying to offload 77Ws to reduce and optimize fleet size.

Wait, what airlines are doing that?

Several are letting ships come off of scheduled lease, but there's not all that many who are intentionally dropping the fleet type.

BrianDromey wrote:

UA857 wrote:

I´m saying that Boeing should offer 77W trade-in deals once the 779 enters production for the same price.

Never is a strong word, but I cannot see any logical reason to do this? Other than to sell new aircraft.

You just directly answered your own question.

LAX772LR wrote:

Tokyo777 wrote:

Secondly, airlines are trying to offload 77Ws to reduce and optimize fleet size.

Wait, what airlines are doing that?

Several are letting ships come off of scheduled lease, but there's not all that many who are intentionally dropping the fleet type.

Sorry, it may have been a bit of a jump to conclusion as I haven't looked at all airlines, but at least SQ, EY, and NH are offloading them in favor of 'right-sizing' routes with 787s/A350s. I didn't say they were eliminating the fleet type, simply offloading some frames to optimize their fleet...although Etihad has basically said they're eliminating the 777 fleet type for passenger service. NZ may get added to the list as well since they have more 787s on order.

Tokyo777 wrote:

LAX772LR wrote:

Tokyo777 wrote:

Secondly, airlines are trying to offload 77Ws to reduce and optimize fleet size.

Wait, what airlines are doing that?

Several are letting ships come off of scheduled lease, but there's not all that many who are intentionally dropping the fleet type.

Sorry, it may have been a bit of a jump to conclusion as I haven't looked at all airlines, but at least SQ, EY, and NH are offloading them in favor of 'right-sizing' routes with 787s/A350s. I didn't say they were eliminating the fleet type, simply offloading some frames to optimize their fleet...although Etihad has basically said they're eliminating the 777 fleet type for passenger service. NZ may get added to the list as well since they have more 787s on order.

Add AF to the list, long term they said the 350-1000 will be the largest aircraft. Now it will take a while untill AF has no more 777s but their strategy seems set (for now).

ZK-NBT wrote:

FluidFlow wrote:

Tokyo777 wrote:

Sorry, it may have been a bit of a jump to conclusion as I haven't looked at all airlines, but at least SQ, EY, and NH are offloading them in favor of 'right-sizing' routes with 787s/A350s. I didn't say they were eliminating the fleet type, simply offloading some frames to optimize their fleet...although Etihad has basically said they're eliminating the 777 fleet type for passenger service. NZ may get added to the list as well since they have more 787s on order.

Add AF to the list, long term they said the 350-1000 will be the largest aircraft. Now it will take a while untill AF has no more 777s but their strategy seems set (for now).

AF? They have parked a small number of 772s I think this far? I don’t think they have ordered any A350-1000s yet? Yes they have said the A350-1000 will be the 77W replacement I believe but the newest 77Ws are what 5 years old maybe?

I think generally we are talking about as a result if COVID-19 what airlines are doing. AF probably won’t park any 77Ws now I don’t think. SQ have removed 4 77Ws, NH, CX and EY significantly more as a result of COVID-19.

Ah I was talking about the trade ins, and I do not think AF is a candidate as they outlied their strategy to move away from the 77W (long term that is), so as the thread is about trade ins, I do not think that AF will take 779s. Now if the deal is sweet enough but with the goal of fleet simplification at AF I do think that the 777 cockpit will slowly be reduced everytime AF can get rid of an 777. Be it retirement, lease return or if a good sales opportunity comes up.

FluidFlow wrote:

Tokyo777 wrote:

LAX772LR wrote:

Wait, what airlines are doing that?

Several are letting ships come off of scheduled lease, but there's not all that many who are intentionally dropping the fleet type.

Sorry, it may have been a bit of a jump to conclusion as I haven't looked at all airlines, but at least SQ, EY, and NH are offloading them in favor of 'right-sizing' routes with 787s/A350s. I didn't say they were eliminating the fleet type, simply offloading some frames to optimize their fleet...although Etihad has basically said they're eliminating the 777 fleet type for passenger service. NZ may get added to the list as well since they have more 787s on order.

Add AF to the list, long term they said the 350-1000 will be the largest aircraft. Now it will take a while untill AF has no more 777s but their strategy seems set (for now).

And Aeroflot, albeit also a long-term move.

Emirates retired a bunch during the crisis.
Virgin Australia completely eliminated the type.

Can't come as a surprise to anyone really. The 777-300ER entered service 17 years ago. Everywhere except in the US, that is considered old. Most of the fleet might be somewhat younger, but it is only going to go downwards from here.

VSMUT wrote:

The 777-300ER entered service 17 years ago. Everywhere except in the US, that is considered old.

The UK, Germany, France, Canada, Australia, New Zealand, and just about anywhere that's not in Asia or S.Africa... would like a word with you.

Average age of the 777-300ERs fleet is just about 8.5 years.

That’s from cirium fleet data

Boeing has done a very limited amount of these deals in the past. The most famous is Singapore Airlines order for 777-200ER when they took in some A340-300. That was a very large order and specialized.

Two years back there were still lots of B747-400ER in the fleets. Now we discuss what to do with B777-300ER.
Credo of monetarism: cheap money makes stupid investments. Sounds like too many widebodies were ordered.
How many widebodies were ordered since Covid 19 started?
Airlines are lucky that Boeing got so much trouble.
Any B777-300ER got scrapped?

ltbewr wrote:

The 777W seems to be an odd variant that seems to have limited value as a trade in and continued use. Boeing might take them to make a deal on new aircraft with some favored customers, but many just might go to scrap.

A stellar selling variant with a freight conversion in work an odd variant? While many will be scrapped, more will become freighters.

We are talking a plane with a limit if validity of 60k cycles and 160k hours:
https://www.boeing.com/commercial/aerom ... ticle2.pdf


The support economics will be helped by 247 ordered 777F and one assumes parts kept in production for the 777x. Heck, there might just be enough 777F to keep the GE-90 powered fleet going for decades.
https://en.m.wikipedia.org/wiki/Boeing_777

As I posted before, there is more motivation for GE to keep the GE-90s in service producing parts and support revenue. I would expect them to step up for 777-300ERSF conversions. A second conversion line is being setup, starting 2024:
https://www.flightglobal.com/air-transp ... 06.article

Funny that mentions 777-200LR conversion too. That is the first I read about that. I am a proponent if the 777-200LRSF, but that doesn't commit the resources needed to make it happen. I don't know when in 2022 the 777-300ERSF enters service, but we cannot ignore a conversion about a year away.

https://www.flightglobal.com/air-transp ... 06.article
I see no reason hundreds of 777-300ERs won't become freighters. That will keep values up a bit.

Lightsaber

jfk777 wrote:

Boeing has done a very limited amount of these deals in the past. The most famous is Singapore Airlines order for 777-200ER when they took in some A340-300. That was a very large order and specialized.

Yes indeed, it was for 77 B777 which, at that time, was the single most expensive order. Singapore Airlines got Boeing Capital Corporation to take all 17 A340-300. The final two A343 left Toulouse and flew to Boeing directly. The A343 later went on to serve EK, GF and CX among others. Now SQ got BCC to take back their older B777 fleet in exchange for B787. Those older B777 prove to be useful for Boeing when several were used to cover B787 grounding recently. I won't be surprised if BCC is also taking back their first four B777W which were recently impaired as well as balance 23 B77W. As far as I know only Singapore Airlines actively uses such mechanism to secure new order with Boeing.

Sokes wrote:

Two years back there were still lots of B747-400ER in the fleets. Now we discuss what to do with B777-300ER.
Credo of monetarism: cheap money makes stupid investments. Sounds like too many widebodies were ordered.

There were lots of signs that a bubble was forming. That said, can't really blame anyone in aviation for Coronavirus breaking out.

Sokes wrote:

Any B777-300ER got scrapped?

Yes, the Jet Airways machine in Chennai was chopped up in January and February.



https://twitter.com/i/web/status/1350790117015785473

I recall from somewhere that there is a small handful of other 777-300ER's that are likely to be scrapped soon as well. From discussions I had with people involved, 2 or 3 more of the Jet Airways are likely to share the same fate, and that was prior to Coronavirus.

VSMUT wrote:

Keep in mind that Boeing is a for-profit company. They exist to make money, not push out 777Xs for our enjoyment. With that in mind, consider following:
- Boeing has to remarket the 777s that get traded in. Demand is currently next to nothing, so the price would be really low. Boeing would either be taking a very big loss, or be able to offer a discount of next to nothing on the 777X.
- Boeing makes a lot of money on supporting in-service types. Aftermarket support is a big business. It is in Boeing's interest to keep the old 777s flying where they are.

I have been privy to a deal at another manufacturer that burned its fingers on a trade-in deal like this. At the time it made sense, eventually the market changed and it didn't. Half the aircraft went directly to the scrapper at the manufacturers expense. IMO, now is definitely not the time unless you have something really attractive to trade in like an A320/321neo, A220 or E2.

737-800s and 767-300ERs are hot commodities right now for freighter conversion. Older 737-700s, 757-200s, 777-300ERs, A330s and A321s aren’t in as high of demand although there is some demand for freighter conversions on those airplanes.

I believe that if Emirates cancels, or significantly reduces their order for the B777X's, I would not be surprised if Boeing went to the two US B77W airlines, American and United making an offer to take those aircraft in on trade for some of the B777X's that EK refuses.

Given the large number of B744F's & BCF's that need to be replaced in the next decade, I can't imagine that Boeing will sit back and allow GECAS and IAI corner the market on the B744F's most logical replacement, which would be freighter conversions based on the B77W. Selling brand-new, $200M+ B778F's may eventually have a future, but only the big package movers, Fed Ex, UPS and DHL have the financial ability to buy them at a rate to justify production. The rest of the B744F lift is by ACMI operators who usually don't buy new aircraft.

FLALEFTY wrote:

I believe that if Emirates cancels, or significantly reduces their order for the B777X's, I would not be surprised if Boeing went to the two US B77W airlines, American and United making an offer to take those aircraft in on trade for some of the B777X's that EK refuses.

Given the large number of B744F's & BCF's that need to be replaced in the next decade, I can't imagine that Boeing will sit back and allow GECAS and IAI corner the market on the B744F's most logical replacement, which would be freighter conversions based on the B77W. Selling brand-new, $200M+ B778F's may eventually have a future, but only the big package movers, Fed Ex, UPS and DHL have the financial ability to buy them at a rate to justify production. The rest of the B744F lift is by ACMI operators who usually don't buy new aircraft.

Hold your horses. There are only something like 200 747-200/300/400 freighters out there. Significant, but not enough for Boeing to go on a buying spree for several hundred 777s to convert over a short timespan. In any case, all the 747 freighters aren't going to be timing out overnight - it is going to be a continuous replacement cycle over a couple of decades.

VSMUT wrote:

Sokes wrote:

Two years back there were still lots of B747-400ER in the fleets. Now we discuss what to do with B777-300ER.
Credo of monetarism: cheap money makes stupid investments. Sounds like too many widebodies were ordered.

There were lots of signs that a bubble was forming. That said, can't really blame anyone in aviation for Coronavirus breaking out.

Sokes wrote:

Any B777-300ER got scrapped?

Yes, the Jet Airways machine in Chennai was chopped up in January and February.



https://twitter.com/i/web/status/1350790117015785473

I recall from somewhere that there is a small handful of other 777-300ER's that are likely to be scrapped soon as well. From discussions I had with people involved, 2 or 3 more of the Jet Airways are likely to share the same fate, and that was prior to Coronavirus.

Yes, quite a number of Jet Airways B77W maintenance records were not well kept prior and after their bankruptcy. Same goes to their A332 fleet, hence you won't see them being converted. Such sad ending to their fleet.

RoyalBrunei757 wrote:

The final two A343 left Toulouse and flew to Boeing directly.

Airbus threw a ginormous fit over that, and initially threatened not to support such aircraft when sold.... CX rather publicly called them out on that bluff.