Last Tuesday Delta CEO Ed Bastian responded to an employee question in an ‘Ask Ed Anything’ video about whether the airline would ever acquire used Boeing 777s.
Delta created a lot of controversy 3 years ago when then-CEO Richard Anderson claimed the airline would buy a used Boeing 777 for $7.7 million. He claimed there was a ‘huge bubble’ in used widebodies and that a 10 year old Boeing 777-200 was worth about $10 million.
Copyright: idealphotographer
Boeing pushed back hard on the idea that their aircraft were worth so little. Others defended Delta’s claim.
And a funny thing happened. We never actually saw Delta buying used Boeing 777s. There was speculation at the time that there must be an airframe somewhere in poor condition, without engines, that was essentially going to be scrapped for parts at the kind of prices Anderson, now head of Amtrak, was talking about.
And Bastian finally concedes this was the case.
We had looked at 777s for part out, which means we buy the 777 and then we carve it up and use the pieces. The pieces are actually more valuable than the aircraft itself given the age of the aircraft.
There had been some numbers floated around that maybe we could pick up 777s for about $10 million. That wouldn’t be $10 million to fly it, that would be $10 million to carve it up and use it for parts on our existing fleet of 777s.
We’re always opportunistic in the marketplace but I don’t think you’re going to be seeing any used 777 purchases any time soon.
Translation: Bastian’s predecessor was talking smack but couldn’t walk the walk.
Snooze
I dunno, I found it interesting
They must still have a lot of parts on ’em. I had a quote for a (okay, much older) 747-200 shell at between $200k – $400k (depending on condition). But that was literally a SHELL – don’t even think it had windows or cables left.
Maybe in 5 years, when the B787 and A350 become more predominate?
@Robert: The point is the CEO said the amount and Boeing reacted to it. Years later, Delta had to publically respond to an employee ?. Ten years old seems kind of young in airplane years, so I wonder how quickly Boeing’s and Airbus’ decline in value over 10 years… hopefully not 90+%. I thought these planes are suppose to last 20-30 years if well maintained.
I think it’s more of in today’s world every comment or statement (dumb or dumber) is captured, tweeted, blogged, etc. . . it’s ridiculous. Plus everyone takes every statement as fact. . .don’t you think sometimes these guys are just seeing how far people run with it?
Why we are still talking about a comment that was dumb 3 years ago is still dumb today and we are dumb for brining it up again. . .Slow news day 🙂
“Plus everyone takes every statement as fact. . .don’t you think sometimes these guys are just seeing how far people run with it?”
Eh, when you’re making statements as the CEO of a publicly traded company the stakes (and law) are different on this. Not saying what he did was unlawful, but there’s definitely a different standard here.
Financing secured, 10 million
They did buy one. N318MH. It was a former Malaysia Airlines aircraft. I’ve seen luggage tags made from this aircraft go on sale.