In focus: the 777 Classic

This week we take a look at the Boeing 777 Classic primary and secondary markets as a follow-on to our report last week in advance of the A340 Summit hosted by Airbus, Rolls-Royce and CFM International with additional presentations by Lufthansa Airlines and HiFly. We have a follow-up of this meeting on Leeham News and Comment.

The 777 Classic presents a very different picture compared with the A340. As a reminder, here is the current status of the A340 program, which is now out of production:






In Service










                        Source: Ascend                                                Leeham Co Chart

On the other hand, Boeing has delivered 1,156 777 Classics and has a current backlog of 318. There are 259 orders and commitments for the 777X, officially launched last month at the Dubai Air Show, for a total of 1,415.

The Ascend data base, which tallies Letters of Intent, Options and Option LOIs, (and calculates orders and commitments somewhat differently than Boeing), has 2,059 units listed.


777-200 (All)

777-300 (All)

777 Classic TBD



777X TBD

In Service





















Option LOIs




























Source: Ascend





Leeham Co. Chart

The 777 program has been more successful than Boeing’s wildest dreams, and the 777X is off to a promising start.

While Airbus faces challenges with the A340 family on the secondary market, Boeing doesn’t have any similar issues today. There are just seven Classics stored, according to Ascend: six 200s and one 300, compared with 54 A340s of all sub-types, or 15% of the total fleet compared with 0.6% for the 777 Classics.

Most of the Classics remain with the original operators. Only a few -200ERs and five -200LRs have traded, the latter a special case because the original operator, Air India, was in financial distress and elected to dispose of the airplanes at a distressed price to raise cash.

What is the secondary market potential for the Classics? Market Intelligence suggest very little-to-no market for the 86 777-200 “standards,” the light-weight, 545,000 lb, 5,240nm initial version of the Classic family. The heavier weight 777-200ER at 656,000 lbs and 7,725nm range is a secondary passenger market and a freighter conversion candidate. Boeing has been studying a P2F conversion for the 200ER, but this potentially is a costly option, according to the Market.

The -200ER was optimized for passenger service and includes composite floor beams that will have to be replaced with steel beams, according to a 2012 Boeing briefing. Major structures and component work will be required. Then, Boeing assumed early -200ERs would be priced in the high $20m range, and the conversion would cost in the low $30m, for an out-the-door price of the low $60m.

Kostya Zolotusky, managing director for Capital Market Leasing at Boeing Capital Corp., tells us that nothing has changed in P2F timing. Feedstock values, however, are too high and a weak cargo market means there are plenty of Boeing 747-400s and MD-11s surplus today. Boeing does not expect the freighter market being strong at least for a couple years.

He believes there is a potential market for the 777-200 standard for package carriers outside the mature USA market. A 777-200ER P2F would be a different airplane vs the new-build 777-200LRF: an 80 tonne airplane vs 100T.

Zolotusky notes that the 777 “has one of the lowest movements out of the original operators out of all the wide-bodies. There is nothing that is parked or in distress.” All 777s are within 90 percentile of original operator, he tells us and compared the Airbus A330s in 80s and the A340s in 70s.

One of the issues with the A340s are the Power By Hour arrangements with Rolls-Royce for the A340-500/600 engines. “We are talking to engine makers to be sure we don’t have A340 situation that limits the liquidity with PBH situation,” Zolotusky tells us.

While this is a follow-on to the A340 report of last week, Zolotusky urged that we “decouple the conversation from A340. The A340 became economically unviable.”

34 Comments on “In focus: the 777 Classic

  1. While a used B-777-200/-200ER is an expensive proposition in the P2F market, their potential continued use as strictly a passenger carrier continues to out pace all of the A-340s. The A-340’s value is in quick delivery and on short term leases and that is about it. Yes, a few A-340s will find a longer life in the secondary market at charter airlines because of their cheap acquisition price, their value as a freighter is zero.

  2. Scott’s charts indicate one of the most remarkable periods in aviation history, or perhaps in the history of industrial production. It was a time when both OEMs nearly destroyed themselves by dysfunctional decisions. In A’s case, it was the combo of the 4-engined 345/6 and the A380. In B’s case, it was the stunningly incompetent out sourcing of the 787.

    A elected to go with four engines even tho they knew that the -300ER was on the horizon with two, and that the collapse of 340 orders had already begun with the 342/3 vs the 772ER twin. They did this so they would have enough money to do the 380, which they launched in 2000. A did the 380 without having near unequivocal projections of positive sale prospects and despite substantial evidence to the contrary. In essence, A simply ignored the obvious, burgeoning mkt for smaller P2P products that was developing in the late ‘90s. The results are coming full circle today: A’s truly embarrassing “A340 Summit” which they had to conduct in a desperate “hail Mary” attempt to add value to the A340 which the mkt won’t add, all because of “four for the long haul,” and the easily predictable slow sales of the A380 in the face of the huge mkt preference for P2P, reflected as much as anything in the success of their own A330.

    For B, it looks like the 787 is finally getting off the ground, and staying on course for its various destinations. But I believe the stain of B’s botch of this program will linger for decades, not only because of the out-sourcing, but because of B’s Wall St. mentality that they did not even need to recognize risk, with the result that B lied and prevaricated for years about the program. Along the way, the 787 chewed through Bear, Shanahan, Carson, Albaugh, and Francher; and to top every other incompetence, culminated in the battery botch which revealed that B had not designed a safe electrical system that protected against lithium battery melt down even though Larado and the destruction of a building by fire where batteries were being used had occurred during the testing process for the 787. I think this unbelievable failure, which was revealed thank God in planes that were not in the air, remains incomprehensible to the public and industry, including JAL and likely ANA.

    Also along the way, B’s 24/7 absorption in solving the 787 problems meant that they lost chances to do the NSA properly (and thus gave A320neo 60% of the single asile mkt), and to deliver the 777X by 2018, thus opening the mkt to the A350 (which essentially with 2 engines corrects A’s errors with the A340), and to build an ER version of the 7810.

    No wonder EK and other 777X customers are begging B not to repeat the 787 experience.

    • Airbus would not have gotten “easy” ETOPS like Boeing did.
      (And at the time Airbus still had to build up some reputation.)
      Airbus had to pressure Boeing towards a big ETOPS Twin ( with exactly the A340 range you deride as failure )
      Then we also had it mentioned that GE would not do bespoke engines for Airbus.
      “Take what we’ve got or else ..
      IMHO judged by Airbus gaining in market share over the years all major errors seem to have been sidestepped.

  3. Short addition: The chart counts the B777F as “B777-200”, which it technically. However, it kind of indicates that the -200ER as passenger aircraft is still a life program, which it isn’t.

    • The 777-200ER is still offered, though we agree it’s dead. The 777-200LR has a few undelivered aircraft left, though there hasn’t been an order for some time.

      • The B-77E, B-77L, and B-77W did what Boeing hoped they would do, kill off the A-342/3/5/6 and even made sure they are next to worthless on the secondary market.

      • B-772 killed the 343, like Boeing hoped they would do, yes, but the A333 did for the B-772 in the same way. Mission creep seems to be the way of it everywhere. I think the A-340-500/600 was already dying, just wasnt good enough, when the 77W appeared, it killed the B-748i instead, another case of mission creep.

    • Yeah keesje, go ahead and develop the most complicated loading and unloading freighter conversion in the industry. The fact they use internal elevators, instead of a main deck cargo door shows how useless the A-340 really is in the secondary markets. You do know that to install internal elevators strong enough and big enough to lift palletized cargo you have to cut several floor beams. If you want to have the elevators as a pallet position inflight, you have to make it fail safe and certify it.

      • “If you want to have the elevators as a pallet position inflight, you have to make it fail safe and certify it.”
        So if you want to add a main deck freight door you use a tinopener or hacksaw and be done with it ;-? I wouldn’t be too surprised if the elevator concept could well pose the lesser design and certification hurdle.

        • Side mounted main deck cargo doors have been used on aircraft since the days of the B-367-80, which had two of them. They have also been cut into countless converted freighters with no problems. Combi airliners have pax sitting right next to them, such as on the B-707-320C, DC-8, B-747-400M, and MD-11C, etc. There have been a few that have opened inflight, mostly because they were not latched properly, or in the case of the early DC-10s, improperly designed latching mechanisms. Airbus uses them on new built freighters like the A-300-600F and A-330-200F,as well as older A-300B2/4CFs and A-310-200/-300CFs. The designs, and improvements to the design have been certified, not only by the EASA and FAA, but authorities around the world.
          Structurally, the side mounted cargo doors are a much cheaper, easier, and stronger installation on P2F conversions than the structurally of the weakening of main body support beam structures by cutting them to make a hole in the floor.
          But even the concept of floor installed elevators still loads and unloads cargo through the side mounted, hacksawed through the skin cargo compartment cargo doors.
          BTW, cargo floors must be certified to 2Gs down (and 9G forward, 1.5G to each side, 2G up, and 3G aft) of the cargo/pallet combination strength inflight. For cargo sitting on an elevator, this means more beefed up structure for the elevator and lifting mechanism is required.

    • T7 of all forms -200 combined did okay – particularly the -200ER, initially known as the -200IGW. That body length has been produced in greater numbers that the DC-10 of L-1011, as well as being nearly double the A340 fleet.

  4. Why compare the A340 to the 777 program at all without addressing it’s twin? The A330 came out one year later and the 330-300 even seats more than a 343. Many airlines certainly compared and decided as between the two mfg’s bigger twins, not the quad vs. twin. 4-engines-4 long haul was the second shortest lived mfg ad campaign I can remember (next to the 18 inch seat one A had for a few weeks.)

    I think the A340 program was created whilst Boeing was still finishing the last 747-300’s (Air Force 1’s). It did ok as a slower, long range, smaller competitor vs. the 744 (and of course the MD-11).

    • The initial 777’s had greater floor area and greater wing area than the initial A340’s. The only logical thing was to compare the 777 & A340 – the A330 never has the payload-range capability to compete in that arena. Despite their two-engine “limitation”, those T7’s where heavy iron against the A340-200/-300.

      The A340-600 has slightly larger wing area than the 777-300ER, but still smaller floor area, and the initial models where in fact less powerful.

      (The current AF1 is based on the 747-200.)

  5. Reply to Uwe:

    What hard evidence do you have that ETOPS for an A-produced twin engined wide body LR family would have been difficult? A had already etopped the A330 before the 777 got etopped.

    When have I “derided” the A340’s range? It’s specs were spot on.

    You claim as always that there was no other engine OEM which could have built an equivalent to the GE 90. Why couldn’t RR or P&W have done it alone or together in a joint venture? The real reason A did not build a new twin engined family for the 3-400 pax LR segment (like at long last they are with the A359, -1000, and likely -1100) was that they wanted really badly to build the A380, notwithstanding the softness of the projected production info, and they could not afford to build two new big twin aisle families at the same time. (Actually the A380 is a four aisle family.)

    “IMHO judged by Airbus gaining in market share over the years all major errors seem to have been sidestepped.”

    “Sidestepped.” You are kidding, riight? A has not sidestepped its liability in the billions on its guarantees of the A340s’ residual values far in excess of their true mkt value, guarantees they had to make to sell the planes because they were four engined.

    “Airbus had to pressure Boeing towards a big ETOPS Twin.”

    Please explain what you mean by this. So far as I can recall, this is a completely new justification for “four for the long haul,” never before presented in the numerous past jousts we have had over this issue. It deserves a detailed presentation.

    • ETOPS: see the A310 that flew ETOPS like missions except in the US.
      FAA being overly aligned with the national airframers didn’t start with the 787-

      Then A340 _product_ range, i.e. A340-200, -300, -500 and -600.
      IMHO you have time convoluted the waypoints on ETOPS expansion.
      Of interest here is the GE90-115, GE would not have offered this to
      Airbus, RR would have though. But still Airbus would not have been able
      to expand ETOPS rules with the FAA to make such a product usefull.
      The FAA would have dragged their feet until Boeing could offer a comparable product. Hard proof for this ? obviously not. “Aber wir kennen unsere Pappenheimer” 😉 Snowdon will not have been able to stock on this information
      but I would not be surprised if some other massive “leveling of the playing field” activity becomes public.
      Obviously Airbus made significantly less errors than Boeing did.
      Maybe you are unable to value what they did right 😉

      • The ETOPs rules today where written by Boeing, initially for the 767, then for the 777.

        I find Boeing commercial strategy more global than Airbus – as evidenced by their correct view for p2p large twin-jet aircraft — their market research, forecasts have been very closely followed by their aircraft development, which has rewarded them fairly well. Boeing has also been much stronger than Airbus on the regulatory side of the business – they have pushed more vigorously than Airbus on the operational side of things. Airbus twin-jet aircraft development comparatively has been far more conservative than Boeing’s in every respect.

      • “I find Boeing commercial strategy more global than Airbus – as evidenced by their correct view for p2p large twin-jet aircraft — their market research, forecasts have been very closely followed by their aircraft development, which has rewarded them fairly well.”

        I have the impression the first big twin, A300, competed with the 707 and DC10, roughly 10 yrs before the 767. And the A330 also flew a few years before the 777. Market research rewarded Boeing fairly well on the 777. Not on the 747-500/600, 753, 764, Sonic Cruiser, 783, 748, NSA and the jury is still out on the 777X, specially -8i.

      • “Market research rewarded Boeing fairly well on the 777. Not on the 747-500/600, 753, 764, Sonic Cruiser, 783, 748, NSA and the jury is still out on the 777X, specially -8i.”

        It doesn’t matter, where it mattered, Boeing did very well, they fully utilized at the tools at their disposal – technology, design, market research, law – to produce a winning product.

        I think they’re bleeding too many tears about not winning that much in the VLA market, when they’ve said all along the market isn’t that big. So we can scratch out the 747 product development studies already – albeit, 9 years it took to finally do something. In any case, they have sold an awful lot of 747s already, the 747-8 isn’t that bad, as its has a dual role, which will help its valuations for some time. I think Boeing has guarded its dominance in the 700-planes-every-20-years-400-seat-market remarkably well since first introducing the 747. Of course, it’s just that now the 777-300ER does the work. Mission creep happens.

        753 – they sold 1,000+ 757’s, don’t think they’re too sad about that one either — in any case, it showed where the market is for that kind of thing. Helped clarify where development of the 737 should go — eventually.

        764 – they sold 1,000+ 767’s, don’t think they’re too sad about that one either — in any case, they have a Tanker that should help keep that line open a bit longer. The 767 has outsold the combined A300/A310 total.

        Sonic Cruiser = bait. In any case, the Sonic Cruiser pointed them to the 787 – which was a reasonable idea badly executed.

        783 = 753

        NSA – they did screw-up that one, didn’t they, ah well.

        777-8X – if that aircraft delivers the economy they’re selling it with, it may survive. But the 777-9X is going to be something very special.


        I think it’s unfortunate that having developed the A330 before Boeing did the 777, Airbus failed to press the regulatory lever. But I think, we’d be missing the point if we looked at it like that. The A330 was initially a very large regional airplane. It did have legs, but Airbus was quite happy installing it on regionals – if you could call it that. And, in any case, it was always a smaller aircraft than the 777, it was always aimed at thinner long-haul than the 777. The A330 is their premier long-haul airplane — for Airbus, their ultimate expression of the A300 frame, which retires when the A350 enters service. The A330 is the first, and only Airbus widebody, so far, over 1,000 sales.

  6. On it’s own, the A340 could certainly be considered a failure. However, if it is remembered that an A340 is nothing but an A330 with 4 engines, then it is merely a part of a highly successful product line. Not only were the A330 and A340 developed simultaneously by the same people, they share basic wings, fuselages, empenages, interiors, flight controls and electronics – and even the tooling made to construct them. Together, over 1400 of these aircraft have been delivered.

    Or…you could look at it like a deranged social scientist and say that the A340’s place was to block the rise of the 777-200 until the A330-300 snuck up from behind the 772 and clubbed it to death. Afterwards, this market was ever dominated by the glory of the A330-300 and the everlasting magnificence of the of the A350-900. Of course, how could Airbus or anyone predict such a thing back in the late 1980s?

    Or…you could look at it like an economic realist and say even though the A340 probably didn’t cost Airbus much, if anything, Airbus might have been financially better off had they not built it. However, Airbus built the A340 not realizing that Boeing was going to prove to the FAA and everyone else that 2-engined Jets were reliable enough to deserve high ETOPS ratings, and thus cut the A340 off at the knees. This is my view.

  7. So the 777X has actually 53 firm orders after the delayed but much heralded launch. For delivery after 2020. Overwhelming support or it hope driving our perception?

    • Oh, come on: Airbus and Boeing (and Bombardier and Embraer) announce deals and firm up the contracts later. SOP. Don’t work so hard at pissing on Boeing, Keesje.

      • No Scott, just a bit surprized about actual firm orders vs the 250+ number floating around in the mainstream media. Obviously Boeing communication did a good job or had an easy job. Maybe include ~300 more “commitments” for the A350 too and start boosting it passed 1000 before EIS. Maybe it sticks? .. I prefer signed contracts.

    • A bit sour grapes again? I suppose the remaining orders went the same place that the 50 additional A380 orders from Emirates went… As was so kindly pointed out, this is just SOP. If we want to get down to the nitty gritty, the A380 didn’t even have a firmed order until almost a year after the first order announcement. And while we’re counting 53 still beats the first year and a half of A350-1000 orders, not to mention the first year and half of “firm” A380 orders.

      • Observing that contrary to to the impression generated by the press the percentage of options and buying right is unexpectedly rather high
        is not sour grapes but a factual observation.
        ( And note this is not about the delay between announcements and booking but about bookings not matching up to announcements.)

        Currently the 777X is a MaybeLiner and did not receive the resounding confirmation that the general reporting insinuates.

      • If its not sour grapes its definitely grasping at straws. I haven’t been following the orders as they come, seems that the actual bookings and LOIs add up past the announced numbers (225 at Dubai + 34 LH. who else did I miss?). Must I point out that it took Emirates a year and a half to firm up its first A380 orders? Then again, if the 777x is going to mirror A380 sales, maybe you’re right about it being less than a resounding success… 😉

        • As I wrote before: This is not about delayed firming of announced orders but about there being significantly more options and purchase rights in the sales mixture. … all nonetheless lumped together as (insinuated fixed) sales.

          Look at the recent LH order : more B planes by unclassified numbers but significantly less hard sales than Airbus. Then a similar picture from the DXB Airshow.

  8. The A340-200/300 sold nearly 250 times. Airbus was able to enter a market which was Boeing and MDD territory before. The A340 was more successful than the MD11. So calling the A340 a failure actually sets a pretty high mark. By that standard pretty much all aircraft programs are failures.

    • Yes, the A340 was the first true long-haul aircraft by the European manufacturer. While Airbus has successfully entered that part of the market, Boeing has maintained a greater market share on large aircraft.

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