Boeing, Airbus

Booming Demand for Used Airliners

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There are currently six times as many secon-hand Boeing 777 airplanes on the market as a year ago.
  • Why it matters

    Why it matters

    The production boom at Boeing and Airbus, underway for several years, is creating a glut of used airplanes, with far-reaching consequences.

  • Facts

    Facts

    • The CEO of Delta Airlines recently acquired a used Boeing 777 for $7.7 million.
    • The financial troubles of Malaysia Airlines and Transaero have suddenly led to the availability of older Boeing 777s.
    • The oversupply of used aircraft has prompted Airbus to produce fewer of its popular A330 models.
  • Audio

    Audio

  • Pdf

Richard Anderson knows how to apply pressure. The chief executive of the U.S. carrier Delta noted recently that he wasn’t willing to pay more than $10 million, or €9.2 million, for a 10-year-old Boeing 777-200.

“We can buy those airplanes and take parts off of them even if we don’t end up flying them,” he said.

But some question whether an airplane for which airlines paid an average of €200 million should be sold for parts after only 10 years of service.

Mr. Anderson’s statement caused a stir in the aviation industry. Boeing promptly countered that the 777 holds its value relatively well, and that the aircraft should still be worth more than $50 million after several years of deployment. But the Delta chief executive isn’t backing down. Three days ago, Mr. Anderson tweeted that he had acquired a used 777 for only $7.7 million. He didn’t mention how old the plane was.

The case shows that the market for used airliners is under pressure. The production boom at Boeing and Airbus, underway for several years, is creating a glut of used airplanes. The risk of an oversupply is growing, with far-reaching consequences.

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