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Would Delta or UAL consider more 747-400s? Buy now for $36M Apiece...

johnsonrod

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I understand the rationale for buying more fuel-efficient airplanes. Maitenance becomes very expensive too on the older airframes. That said, why should Delta or UAL (or the cargo carries like Atlas, Kalitta and Southern) consider newer, more expensive airframes when you can buy passenger 744s for as low as $36 million? Delta loves to buy older airframes that they have experience on (through NWA for the 744). Why not add 10-15 747-400s and place them on the high-capacity Asian routes? Plenty of 400s also sitting in the desert right now...

See the Bloomberg article below:



Prices for Boeing (BA) Co. 747-400s, the most popular wide-body plane, are tumbling as carriers rush to replace what were once their flagship aircraft with newer and more fuel-efficient models.

Boeing 747 Prices Tumble

Employees work on a Load Air Cargo Boeing Co. 747-400 freighter airplane at Boeing's manufacturing plant in EveretT, Washington. Photographer: Kevin P. Casey/Bloomberg





Ten-year-old passenger 747-400s are worth a record low $36 million, about 10 percent less than similar aged planes last year, according to Ascend Worldwide Ltd., amid high fuel costs and a cargo slump that has damped interest in converting aircraft into freighters. Forty-eight of the 404 humpbacked passenger 747-400s worldwide have also been placed in storage, according to the London-based aviation consultancy, as the once“Queen of the Skies” is shunned for 777s and Airbus SAS A380s.

“There’s not a lot of demand for the 747,” said Paul Sheridan, Ascend’s Hong Kong-based head of risk analysis.“They’re mostly being broken up for parts.”

The decline in prices contributed to Singapore Airlines Ltd. (SIA) having a surprise loss in the quarter ended March after the sale of the carrier’s last 747-400 raised less than it expected. Japan Airlines Co. has also stopped using the planes, and operators including Cathay Pacific Airways Ltd. (293), Korean Air Lines Co. and Malaysian Airline System Bhd. (MAS) arefollowing suit to help counter fuel prices that have jumped about 30 percent in two years.

“When oil prices are high, you want your new airplane,”Cathay Pacific Chief Executive Officer John Slosar said this week in Beijing. “The last thing you want to do is hold onto your older planes.”

The Hong Kong-based airline said last month that it’s speeding up the retirement of its 21 passenger 747-400s. The carrier plans to shed nine through early 2014 as it adds more 777-300ERs for long-haul flights. Cathay is also retiring three-400 freighters this year because of the arrival of new 747-8 cargo planes.
1960s Development

The first four-engine 747-400 was delivered to Northwest Airlines in 1989. The standard version can fly as far as 7,260 nautical miles (13,450 kilometers), carrying 416 passengers in three classes, according to Boeing’s website. The Chicago-based planemaker delivered the last of 694 -400s in 2009. The original 747 was developed in the 1960s.

The passenger version of the newest 747, the -8, entered service this year. It can fly 467 passengers in three classes as far as 8,000 nautical miles. The twin-engine 777-330ER, first delivered in 2004, can carry 365 people as far as 7,930 nautical miles.

“We’re seeing a lot of airlines understanding that they need more fuel-efficient planes and that bodes very well for us,” Jim Albaugh, the head of Boeing’s commercial-plane business, said in a Bloomberg TV interview.
Newer aircraft use less fuel because of the development of more efficient engines and of lightweight materials. The 787 has a fuselage built from reinforced plastics, compared with the 747’s heavier aluminum shell.
Thai Airways

Thai Airways International Pcl (THAI) is in the process of selling four 747-400s and it will begin phasing out the model next year, outgoing-Chief Executive Officer Piyasvasti Amranand said May 31 in Bangkok. The carrier will begin receiving six on-order A380s this year.

Flying 747-400s now “doesn’t make sense,” Amranand said.“It’s obvious that with this sort of fuel price that it will cost you.”

Malaysian Airline System Bhd., which received its first A380 last month, will consume 1,181 barrels of fuel flying the 494-seat aircraft to London from Kuala Lumpur, according to Maybank Kim Eng Securities analyst Wong Chew Hann. The carrier’s 359-seat 747-400s use about 999 barrels of fuel on the same route, he said. Fuel accounts for about a third of airlines’costs, according to the International Air Transport Association.
A380 Prestige

The A380, which surpassed the 747-400 as the world’s largest commercial plane on entering service in 2007, has become the flagship for carriers including Singapore Air and Qantas Airways Ltd. (QAN) Airlines still reliant on 747-400s are at a disadvantage in terms of costs and prestige, said Maybank’s Wong.

“It takes an A380 to beat an A380,” he wrote in a June 8 note.
European carriers, operating in slower growth markets than Asian airlines, are replacing 747-400s less quickly. British Airways, the biggest operator, will only retire the last of its fleet in about 10 years. The carrier has 55 747-400s, according to Ascend.

“It’s a great aircraft, customers love it,” said Willie Walsh, chief executive officer of BA’s parent International Consolidated Airlines Group SA. (IAG) “We could replace some of them with 777-300ERs, which we are doing, but we are not looking to replace all of them.”
‘Attractive Aircraft’

BA has also ordered 12 A380s, which will start arriving in about a year. Deutsche Lufthansa AG (LHA) has already begun flying A380s and it has ordered 747-8s. It will still continue using 747-400s, partly because it owns rather than leases them, said Chief Executive Officer Christoph Franz.

“We still think it’s an attractive aircraft and we will use it for quite a number of years,” Franz said. “They are very competitive aircraft in the market for us.”

Newer and smaller long-haul planes are also allowing carriers to open new routes that wouldn’t be profitable with the 747-400. All Nippon Airways Co. (9202), which will retire its last seven 747s by March 2016, is starting flights from Tokyo to San Jose and Seattle using new 787s. Japan Air is using Dreamliners to open routes to Boston and San Diego.

The move away from larger planes has curtailed sales of the A380 and the 747-8, according to Richard Aboulafia, vice president of the Teal Group, a Fairfax, Virginia forecaster. Airbus has sold 253 A380s. Boeing has orders for 106 747-8s, of which only 27 are for commercial passenger operations.
“The market for large aircraft in general is disappearing fast,” Aboulafia said. “Most of the 747-8 planes are cargo. There’s just a limited market.”
To contact Bloomberg News staff for this story: Kyunghee Park in Singapore at kpark3@bloomberg.net; Andrea Rothman in Toulouse at aerothman@bloomberg.net
 

igneousy2

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I have a feeling the $36 million price tag is without the engines.
 

General Lee

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I have a feeling the $36 million price tag is without the engines.


So, how much per engine? $1 million each? It would still be cheaper to buy a used 744 with engines than it would be to buy a new CRJ-1000.

Here's the price according to Google:

Bombardier CRJ 1000

Price - Price $ 46.37 million U.S. Estimated * (Financial Year 2012) Bigger Better and More Advanced NextGen Passenger Jet The CRJ 1000..





Bye Bye---General Lee
 

CheapFlyer

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With the state of the economy and uncertainty of future oil prices: Highly Doubtful.
 

dalad

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With the state of the economy and uncertainty of future oil prices: Highly Doubtful.

Delta is putting out a widebody RFP in the fall/3rd quarter. Also some interest in another carrier's 777-300's that they don't want.
 

waveflyer

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Delta doesn't have enough money after buying the 70 new -900's, jobs y'all are giving away-


***** Home - Airplanes - Light Passenger Jets - Bombardier - Bombardier CRJ 900
Bombardier CRJ 900

***** *****
Price - Current Price $ 34 million - $ 38.93 million U.S. * (Financial Year 2012)
Stretched CRJ700 that Delivers in Loads The Bombardier CRJ 900...........




So, how much per engine? $1 million each? It would still be cheaper to buy a used 744 with engines than it would be to buy a new CRJ-1000.

Here's the price according to Google:

Bombardier CRJ 1000

Price - Price $ 46.37 million U.S. Estimated * (Financial Year 2012) Bigger Better and More Advanced NextGen Passenger Jet The CRJ 1000..





Bye Bye---General Lee
 

Guam360

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I have a feeling the $36 million price tag is without the engines.

that price is do-able, w/engines, easy, those planes are old and will be a dime a dozen, the price for freight companies is to convert them, the slots to do it with Boeing and time.
 

General Lee

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Delta doesn't have enough money after buying the 70 new -900's, jobs y'all are giving away-


***** Home - Airplanes - Light Passenger Jets - Bombardier - Bombardier CRJ 900
Bombardier CRJ 900

***** *****
Price - Current Price $ 34 million - $ 38.93 million U.S. * (Financial Year 2012)
Stretched CRJ700 that Delivers in Loads The Bombardier CRJ 900...........


Wave, you keep forgetting that there will be less outsourcing with this TA. Hopefully though DL will hire a lot of the ALPA DCI pilots. The TA says atleast 35% of each class will be those guys. Good.


Bye Bye--General Lee
 
Last edited:

Sleepyhead

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36 million is high. My company recently bought 2 -400s from United for about 21M each. They were sitting in VCV for 3 years and are only 15 years old. They were in great shape. A Pratt guy told me the engines are worth about 5 mil each, but the prices are falling because more -400s are being scrapped.
 

dalad

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Delta doesn't have enough money after buying the 70 new -900's, jobs y'all are giving away-


***** Home - Airplanes - Light Passenger Jets - Bombardier - Bombardier CRJ 900
Bombardier CRJ 900

***** *****
Price - Current Price $ 34 million - $ 38.93 million U.S. * (Financial Year 2012)
Stretched CRJ700 that Delivers in Loads The Bombardier CRJ 900...........

Or the 88 717's jobs YOU are giving away. You're yelling over to your Delta neighbor from your back porch telling us our house is on fire. But, you have a lot of smoke coming out of your kitchen.
 

waveflyer

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Or the 88 717's jobs YOU are giving away. You're yelling over to your Delta neighbor from your back porch telling us our house is on fire. But, you have a lot of smoke coming out of your kitchen.

I'm sorry, we're selling airplanes and replacing them. We aren't outsourcing them to delta so you guys can fly them cheaper-(though I'm sure that would be profitable for us given your rates)
 

jonjuan

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I'm sorry, we're selling airplanes and replacing them. We aren't outsourcing them to delta so you guys can fly them cheaper-(though I'm sure that would be profitable for us given your rates)

Good for you that Herb decided not to operate RJs. You do realize that flying all 135 seat airplanes in a hub/spoke system is necessary to compete with LCCs, right? Where would you have applied to had SWA been flying RJs?
 

dalad

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Good for you that Herb decided not to operate RJs. You do realize that flying all 135 seat airplanes in a hub/spoke system is necessary to compete with LCCs, right? Where would you have applied to had SWA been flying RJs?

Uh, why SWA of course, he elected to outsource himself. Remember?
 

waveflyer

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Or maybe I pursued Swa because they don't outsource...
Maybe?

As for cpampering with LCC's with 135 seat hub&spoke- I honestly don't get your point-
 

Crash Pad

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Wave I love ya. Your airline purchased a company and is using them through 2016 to do some of the most lucrative flying. All at a greatly reduced labor cost. FA, Gate, Ramp, Pilot, etc. A regional by any other name.

Delta guys. I heard on the radio that mainline is taking back Chattanooga with a DC-9. I think this kind of destroys the "mainline can't do regional cities argument". The cost of gate, MX, ramp is too high. I'm also not sure who you guys think is doing the gate, ramp, MX, etc. for DCI. Most stations use Delta people and the rest are outsourced. Vote for your contract for whatever reason but please don't sell me the scope matters line. It doesn't to you and we all know it.
 

waveflyer

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Crash pad- if delta's TA had a plan to get all DCI pilots on one seniority list beginning today and phasing in over 3 years, then that might begin to be analogous.
 

Crash Pad

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The TA has a provision to get 35% of all new classes from DCI while shrinking DCI. We are in shades of gray. It used to be black and white.
 

waveflyer

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Which I applaud.

I really do-

I can just imagine the opportunity at mainline if -900's were there as well.

I simply do not get why DALPA would validate outsourced -900's and not fly them themself. It's a f^cking dc-9. A more fuel efficient dc-9.
 

Secret Squirrel

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With their underfunded pension obligations they have 21 billion in debt. They might be trying to shift the debt off their books to reduce debt. I believe a lot of those 50 seaters are owned by delta and leased to subcontractors.
 

Crash Pad

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That's the other punch line. GL keeps saying RJs are expensive. Who does he think is paying for them?
 
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