IBA recaps Boeing 777 focus conference

Dec. 9, 2015: The aircraft appraisal firm IBA, headquarter in the UK, issued a recap of the Airline Economics one day conference about the Boeing 777 market that focused on values and marketability of the aircraft. These have been topics of international discussion ever since Boeing launched the 777X (and, really, for some time before) and Boeing faced the challenge of bridging the production gap between the 777 Classic and the 777X.

Rather than recap the reams of data here, LNC is providing downloads to two documents IBA prepared to recap the one-day event. Boeing did not participate. The first document, IAB used widebody-factsheet, is a two page piece that lists top operators of 777s, the number of aircraft coming off lease in the next several years and valuations. The Airbus A330 and Boeing 747 values and selected data is also included.

The second document, 777 Seminar Dec 2015, is seven pages and provides a detailed recap of the Airline Economics 777 Investors day. IBA facilitated the meeting, which was Dec. 2 in London. Airline Economics previously held a similar event about the Airbus A340, another troubled aircraft in the secondary market.

18 Comments on “IBA recaps Boeing 777 focus conference

  1. I guess the Airline Economics one day conference about the Boeing 777 was well attended. All the major carriers operate 777s and rest value of aircraft can determine phase out-planning, ordering, upgrading etc.

    Boeing 777 lessors/operators AerCap / ILFC, Air China, Air France-KLM, ALC, Asiana Airlines, British Airways, Cathay Pacific, China Airlines, Delta Air Lines, Etihad Airways, Japan Airlines, Kuwait Airways, LATAM Airlines Group, Qatar Airways, Singapore Airlines, Thai Airways, United Airlines and Vietnam Airlines all have Airbus A350 backlogs at this moment. Emirates and others might follow.

    Some of these A350s will be for growth, the majority for replacing well maintained, capable 777-200ER and -300ER’s.

    • The same would apply for the A332/3 right? Based on the data supplied it shows that the values of the 777s and A332/3 are consistent with the gradual decline in value. The T7 is highlighted in the slides because there are scores more T7’s than 330’s.

      Those carriers minus OZ have either T7’s or 787’s on order. It’s not a “the A350 replaces the T7 fleet” scenario.

      • “The same would apply for the A332/3 right”

        Not necessarily. The T7 seems to be too big for many potential second hand operators. Now, where have we heard that one before? 😉

        • IMO, the second hand widebody market is more geared towards an aircraft around the size of the 767/A330 (and in the past A300). I expect the used planes to be reconfigured to higher densities to make them economically viable, but how many second hand buyers need a 777 configured to capacities approaching 400-500 seats. The situation is not too different to the A380s.

    • Keesje:

      Lufthansa does not operate 777 pax where this is related to.

      they do have the 777-9 on order.

  2. Interesting to see discourse over 777 coming out of lease near term.
    …. after this has been discussed endlessly for the “unsellable” A380.

    • It certainly doesn’t augur well for the A380’s second-hand prospects.

      • The interesting point IMHO is that another imminent Boeing problem is presented to the public cloaked in an Airbus setting.
        Result: Boeing later has a lesser “also” problem. Looks good.

  3. Minor question: Is the ‘stored’ 772 with G.E. engines actually the B.A. craft from Las Vegas? None show destroyed, but I assume that is an official designation and not based on physical condition but insurance/write off from the books?

  4. On a couple of separate topics:
    1) http://www.telegraph.co.uk/travel/travelnews/12041341/Who-needs-windows-The-plane-where-passengers-sit-in-hold.html discusses a patent that apparently claims cargo area utilistaion these days is only 37 per cent. I know it depends on airline and route, but if any long haul airlines really are running at 37% this must surely affect choice of airliner to buy.
    2) interesting to see JAL swapping its standard 787 31″ 3-3-3 economy for 34″ (or 33″? Varies by source) 2-4-2 on at least some routes. http://economyclassandbeyond.boardingarea.com/2015/12/03/japan-airlines-space-wider-ii-huh/

    • It is my belief that there can be a large market for 2-4-2, 34″ pitch on the 787 and A350 for long haul. Airlines need to build the market by pricing the seats at a cheap premium at first and then gradually increase prices once the market is developed.

      The floor area of a 9 abreast seat at 32″ on the A350 is 20×32 is 640 sq.
      and a 8 abreast is 22.5×34 is 765 sq. so about 20% more area. Airlines can charge a 15% premium at first to build the market, or free upgrades to the middle seats from econ.

      I’m sure the C-zone will always be 3-3-3, but no need for that in the B-zone of the 787 or A350.

    • On the 777, 3-3-3 is not much of an upgrade from 3-4-3. American and United should leave the D-zone at 3-4-3, and build a premium economy section in the C-zone at 2-2-2-2 with three aisles. That’s a 25% increase in ticket price for width, plus 5 to 10% for extra pitch, but still a modest price increase for a huge increase in comfort and no middle seats.

  5. I think P2F conversions for the 777 are closing in. Sufficient available aircraft for attractive prices.

    I think GE has to come with an engine PBH construction for mature GE90’s for the savvy cargo operators. In the end they don’t have a choice, parked GE90’s are worst case.

    • Which 777 frames would lend themselves to P2F conversion?
      I seem to rememeber that replacing the full set of floor beams could be required in some cases.

      • 777-200s.

        I think the 300s would not carry sufficient floor loading per most operators.

        UPS and FedEx might be different in that they tend to bulk out before the weight out. FedEx originally was looking at the 77-200 BCF package.

        I don’t know if that was what was available with good future feed stock and what Boeing was working on or what factors drove that. We will probably see in the near future.

    • Yep, I stated that a while back.

      FedEx would likely be one of the first if not the first to go that route.

      they tried some years back but Singapore kept the feed stock for Scoot instead of putting on the market.

      They like the 777F but they need to eventually replace a lot of MD11 and the 777 conversion would work well on those MD11 routes (ie. not needing the longer legs of the 777F

      UPS is also a big MD11F operator that would be a candidate.

  6. the amount of people who want/need to travel very long haul has in my view been overstated for some time. This and the attractive prices of used aircraft together with the low price of fuel should attract some of the legacy airlines to grow their long haul routes as i’m not sure everyone has the time to travel via the middle east hubs. This situation might even lead the aircraft makers to make an offer to Ryan Air they could not refuse…

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