DL acquires used 772ERs

[WorldTraveler]

There appears to be at least one confirmation that DL is buying 11 used 772ERs that were formerly operated by SQ/family airlines.

The transaction has been rumored for some time.

http://aviationplanning.com/monday-flash-2/

"Tie this to Delta’s mentioned intention to feed China Eastern’s hub at Shanghai, along with their recent request to get back an Haneda slot recently released to American, and there is no question that Delta is going to continue to double-down on Asian growth. Given the expected growth – particularly in China-US traffic – it’s solid strategy."

DL had previously said the economics of buying used international widebody aircraft did not work but apparently this deal is different.

airfleets shows that SQ has 11-14 year old 772ERs.

DL will likely mention the deal in its earnings call on Wednesday.

 

[topDawg]

These 777 probably wont be the end of this deal between DL and Boeing(and Rolls).......... FWIW

 

[jcw]

Looks like these can be used to retire 747's faster

It's great to see DL continue their great ability to leverage old used planes

 

[WorldTraveler]

perhaps a lot more people will be tuning into DL's earnings release and call on Wednesday to find out what else is involved in this deal.

Given that the 744s were used as much over the Atlantic as the Pacific this summer and their capacity is not necessary in either location, it likely is no surprise that DL is happy to look for a deal to match capacity to demand and do it at a very favorable cost. The 772ER is a Pacific plane and low fuel prices will make it attractive. The new 330s can do everything over the Atlantic except for DXB and JNB.

This deal is really a tribute to DL's ability to source older, used aircraft, have Tech Ops maintain them to best in class standards, spend less money on aircraft than their competitors, and run the most reliable airline in the Americas if not the world.

I suspect that dawg is right that Boeing and Delta are figuring out how to play nice together to each other's benefit. The question is simply what impact this will have on Airbus.

 

[topDawg]

Looks like these can be used to retire 747's faster

It's great to see DL continue their great ability to leverage old used planes

 that is my understanding. Extra 777s next year will probably allow for the 744 to be gone in 2016 vs late 2017. 
 

This deal is really a tribute to DL's ability to source older, used aircraft, have Tech Ops maintain them to best in class standards, spend less money on aircraft than their competitors, and run the most reliable airline in the Americas if not the world.

The 777 is one of the least done in house aircraft in the fleet. 

 

I suspect that dawg is right that Boeing and Delta are figuring out how to play nice together to each other's benefit. The question is simply what impact this will have on Airbus.

little to none. 
I don't buy the pilot rumor that the 350 order will be effected. 
 
to much money is already being put into the plane for that order to be changed, IMO. 

 

[WorldTraveler]

I don't believe that DL can cancel or significantly defer the 350s that are due to begin arriving fairly soon without a large penalty either but I honestly don't know.

and let's remember that it is precisely because DL has one of the smallest 777 fleets in the world among major operators that they have not been able to gain a lot of efficiency. Adding 11 more aircraft increases the potential for more work to be done in-house, esp. as the global fleet moves away from the 772ER.

There will be other 772ERs becoming available in the next few years. If the used 772ER strategy works, and if DL really believes it has a strategy to make Asia work where DL has clearly struggled to find a Tokyo hub replacement strategy since the merger, then the 777s could be a pretty low cost way for DL to move into the next phase in Asia - which very well could involve a much greater focus on China where the 777 or 350's range is needed for an effective strategy for most of the US-China market. Even 25 A350s plus DL's existing 18 77s aren't much for an airline that wants to have a significant Asia presence given that Asia flights require pretty close to 2 aircraft to operate a flight on a daily basis.

 

[topDawg]

I don't believe that DL can cancel or significantly defer the 350s that are due to begin arriving fairly soon without a large penalty either but I honestly don't know.

and let's remember that it is precisely because DL has one of the smallest 777 fleets in the world among major operators that they have not been able to gain a lot of efficiency. Adding 11 more aircraft increases the potential for more work to be done in-house, esp. as the global fleet moves away from the 772ER.

There will be other 772ERs becoming available in the next few years. If the used 772ER strategy works, and if DL really believes it has a strategy to make Asia work where DL has clearly struggled to find a Tokyo hub replacement strategy since the merger, then the 777s could be a pretty low cost way for DL to move into the next phase in Asia - which very well could involve a much greater focus on China where the 777 or 350's range is needed for an effective strategy for most of the US-China market. Even 25 A350s plus DL's existing 18 77s aren't much for an airline that wants to have a significant Asia presence given that Asia flights require pretty close to 2 aircraft to operate a flight on a daily basis.

not really. 
And with the non 77W aircraft starting to fade it makes it even less likely. 

 

[FrugalFlyerv2.0]

Looks like these can be used to retire 747's faster

It's great to see DL continue their great ability to leverage old used planes

 
Also I'd imagine that since they're from SQ they're in pretty good condition?

 

[WorldTraveler]

In response to a media question, Richard Anderson says DL has been approached by multiple parties and that current 772ER lease rates are 1/5 of comparable new aircraft.

He said there is no deal at this time but the market is transparent and DL does expect prices to get lower - so he says there is no reason to sign a deal right now.

He also says SQ has up to 70 similar aircraft and there is a limited market in which they can be placed.

 

[topDawg]

In response to a media question, Richard Anderson says DL has been approached by multiple parties and that current 772ER lease rates are 1/5 of comparable new aircraft.

He said there is no deal at this time but the market is transparent and DL does expect prices to get lower - so he says there is no reason to sign a deal right now.

He also says SQ has up to 70 similar aircraft and there is a limited market in which they can be placed.

public negotiations with Boeing again..........
 
Of and they also talked about 332s. I have long said a few extra 332s would fit in quite nicely
 
oh and I will just say, if Delta were to pick up Trent powered 330s that would be pretty cool. 
PW4000
GE CF6-80E1
Trent 700 
Trent 7000
nice. 

 

[dash8roa]

Delta has a knack for finding older aircraft, I.E 717's and MD-90's. Its a good way to preserve funds and if the birds are not too high in cycles, they can pay dividends for years. A little extra fuel consumption means nothing compared to the cost of new aircraft and if, I say if fuel prices stay low for a few years, the savings are considerable.

 

[topDawg]

Delta has a knack for finding older aircraft, I.E 717's and MD-90's. Its a good way to preserve funds and if the birds are not too high in cycles, they can pay dividends for years. A little extra fuel consumption means nothing compared to the cost of new aircraft and if, I say if fuel prices stay low for a few years, the savings are considerable.

just keep in mind, both the aircraft you listed have current gen engines. V2500s power both the 90 and the A320 and the BR715 engine is also of the same age as the V2500/CFM56-5 and -7 but isn't widely used in commercial aircraft. (plenty of corporate/private models though.)