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KarelXWB
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Real Value Of Used 777s

Tue Mar 01, 2016 9:18 am

Remember this:

DL Buys Second-hand 777 For Just $7.7 Million (by KarelXWB Dec 17 2015 in Civil Aviation)

It doesn't look like DL paid anything near $7 million for an used 777:

Quote:
The Boeing 777-200ER is not worth $7.7m or even $10m, but $37m to $47m, according to four appraisers who appeared today at the ISTAT AGM.

Doug Kelly of the consulting/appraisal firm Avitas notes that the Rolls-Royce Trent-powered 777s are, indeed, the least desirable airplanes. GE or PW-powered airplanes commands a $7m premium, he said.

AerCap is selling 777-200ERs with leases attached for more than $50m, Kelly said.

Source
http://leehamnews.com/2016/02/29/istat-day-1/
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Someone83
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RE: Real Value Of Used 777s

Tue Mar 01, 2016 9:38 am

Quoting KarelXWB (Thread starter):

It doesn't look like DL paid anything near $7 million for an used 777

It still could be, there are various definition of used. Buying a aircraft for scrap/spares is different from a fully equiped aircraft ready to be put in service
 
lutfi
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RE: Real Value Of Used 777s

Tue Mar 01, 2016 9:44 am

And buying an aircraft with a lease attached = worth the NPV of the remaining lease payments. Which may be considerably more than the "open market" value
 
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777Jet
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RE: Real Value Of Used 777s

Tue Mar 01, 2016 10:31 pm

Quoting KarelXWB (Thread starter):
It doesn't look like DL paid anything near $7 million for an used 777:

After Richard Anderson retires he might turn up on a.net and debate you  
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burnsie28
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RE: Real Value Of Used 777s

Thu Mar 03, 2016 2:40 am

Quoting KarelXWB (Thread starter):

It doesn't look like DL paid anything near $7 million for an used 777:

$7.7 million according to this

http://www.bloomberg.com/news/articl...77-jet-wiped-out-boeing-stock-gain


Second as mentioned before the definition of used could be a lot of things. Do the planes include engines, is it still in flying condition, etc.
 
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Stitch
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RE: Real Value Of Used 777s

Thu Mar 03, 2016 2:53 am

I do not doubt you could find one 777-200ER for less than USD 8 million.

But I do doubt you can find a dozen or score of them for that price.
 
iahcsr
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RE: Real Value Of Used 777s

Thu Mar 03, 2016 7:15 am

As with most things in life, a commodity is only worth as much as someone is willing to pay for it.
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UA444
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RE: Real Value Of Used 777s

Thu Mar 03, 2016 7:43 am

Still wondering why PW and GE are worth more than RR examples. Is it because most PW and GE customers are hanging onto theirs?
 
jonathan-l
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RE: Real Value Of Used 777s

Thu Mar 03, 2016 7:47 am

An appraiser's value can be vastly different to the market value, especially for a given serial number.

Avitas' comments certainly do not mean that Delta did not pay $7.7m. All Avitas says, if you link the Delta story to Avitas comments, is that Delta got a very good deal on a specific MSN while typically the aircraft would trade for more.
 
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Matt6461
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RE: Real Value Of Used 777s

Thu Mar 03, 2016 7:48 am

Quoting KarelXWB (Thread starter):
AerCap is selling 777-200ERs with leases attached for more than $50m, Kelly said.

If the lease rights are sold with the plane, however, then you're really buying a security entitling you to the remaining lease payments, plus the residual value of the plane.

Quoting KarelXWB (Thread starter):
The Boeing 777-200ER is not worth $7.7m or even $10m, but $37m to $47m, according to four appraisers who appeared today at the ISTAT AGM.

This doesn't specify book or market value. Often massive differences between those two.
 
Asiaflyer
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RE: Real Value Of Used 777s

Thu Mar 03, 2016 8:08 am

Quoting Matt6461 (Reply 9):
This doesn't specify book or market value. Often massive differences between those two.

Book value has nothing to do with this discussion. Why do you even bring that up?
 
lutfi
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RE: Real Value Of Used 777s

Fri Mar 04, 2016 3:13 am

Quoting UA444 (Reply 7):
Still wondering why PW and GE are worth more than RR examples. Is it because most PW and GE customers are hanging onto theirs?

Because 98% of RR examples are "power by the hour" with essentially engines leased from RR. With PW/ GE, the airframe is more likely to allow the buyer to do what they want with the engines (break them up for spares/ sell to some one else)
 
cedarjet
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RE: Real Value Of Used 777s

Fri Mar 04, 2016 11:40 am

Too many variables to be able to say what the secondhand value of a 777-200ER is. Is the plane six years old or sixteen years old? Just out of a heavy check, or due for one? What kind of engines, how many cycles, how many previous owners, how anxious is the owner to sell, is there one of its kind for sale or ten?

I am sure an old one that's been beaten to death and ready for a second — or third — D-check could be picked up for $5 million. Equally a very low time (head of state?) machine that's nearly new could go for north of $50 million, maybe north of 75.
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Andy33
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RE: Real Value Of Used 777s

Fri Mar 04, 2016 12:34 pm

Haven't we also discussed before that there were/are different sizes of cargo doors on 772s, and some airlines chose a smaller size than others? The small size apparently makes the plane's resale value lower as it is incompatible with the handling methods used by many airlines.
 
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SQ22
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RE: Real Value Of Used 777s

Fri Mar 04, 2016 8:27 pm

Quoting Andy33 (Reply 13):
Haven't we also discussed before that there were/are different sizes of cargo doors on 772s, and some airlines chose a smaller size than others? The small size apparently makes the plane's resale value lower as it is incompatible with the handling methods used by many airlines.

Yes, when we were talking about SQ scrapping 772s or derated 77Es.
 
wrongwayup
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RE: Real Value Of Used 777s

Fri Mar 04, 2016 8:38 pm

Quoting iahcsr (Reply 6):
As with most things in life, a commodity is only worth as much as someone is willing to pay for it.

I think the point of the discussion is that aircraft are explicitly NOT a commodity. While one bar of gold or barrel of WTI are fungible, one 777-200ER may not be anywhere close to interchangable with another - age, maintenance status, configuration details, operator history, on- or off-lease... no two aircraft are alike, hence the range of valuations given for a so-called "generic" (should such a thing exist) aircraft.
 
Rdh3e
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RE: Real Value Of Used 777s

Fri Mar 04, 2016 8:44 pm

Quoting wrongwayup (Reply 15):
I think the point of the discussion is that aircraft are explicitly NOT a commodity. While one bar of gold or barrel of WTI are fungible, one 777-200ER may not be anywhere close to interchangable with another - age, maintenance status, configuration details, operator history, on- or off-lease... no two aircraft are alike, hence the range of valuations given for a so-called "generic" (should such a thing exist) aircraft.

No I don't think that's true. They are a thing, that thing is only worth what someone will pay for it. Of course different things have different characteristics etc, but each item is still just a commodity. That's what he's saying.

Also, barrels of oil are highly differentiated, different wells produce oil with different characteristics, like different airlines sell slight different airplanes!

Have fun!   
http://oilprice.com/Energy/Crude-Oil...-Different-Types-Of-Crude-Oil.html
 
wrongwayup
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RE: Real Value Of Used 777s

Fri Mar 04, 2016 9:04 pm

Quoting Rdh3e (Reply 16):
No I don't think that's true. They are a thing, that thing is only worth what someone will pay for it. Of course different things have different characteristics etc, but each item is still just a commodity. That's what he's saying.

Also, barrels of oil are highly differentiated, different wells produce oil with different characteristics, like different airlines sell slight different airplanes!

Have fun!
http://oilprice.com/Energy/Crude-Oil....html

I'm aware that there can be a variation in unrefined oil products, hence my using "WTI" meaning West Texas Intermediate, FOB at Cushing, Oklahoma as a commonly cited reference.

When speaking of aircraft, I think you're confusing the definition of a tangible asset with that of a commodity - as no two aircraft are alike.
 
a380787
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RE: Real Value Of Used 777s

Fri Mar 04, 2016 9:08 pm

Quoting wrongwayup (Reply 15):

I think the point of the discussion is that aircraft are explicitly NOT a commodity. While one bar of gold or barrel of WTI are fungible, one 777-200ER may not be anywhere close to interchangable with another - age, maintenance status, configuration details, operator history, on- or off-lease... no two aircraft are alike, hence the range of valuations given for a so-called "generic" (should such a thing exist) aircraft.

True .... but I'd be very concerned about boarding a 77E that is supposedly in full flying condition and only sold for $7-10m. If $10m is the going price for a 15yo 77E in perfect flying condition, no one in their right mind, other than ME3, would be buying new planes.
 
Planesmart
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RE: Real Value Of Used 777s

Fri Mar 04, 2016 9:22 pm

Not just RR with maintenance contracts.

Boeing and Honeywell terminated official AIMS-1 support at 20 years, other than for customers with a large enough 777 fleet (and deep pockets) to contract ongoing one to one support. Microsoft do the same for corporates still using XP, Vista and the likes.

Obsolete commercial aircraft software will crucify values, unless you are selling with leases in situ.

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