The story of one 777: From innovative jet to bargain-basement deal

I read with interest a Sept. 5 story in Simple Flying on the sale of a Jet Airways Boeing 777-300ER for only $9 million to IAGCAS 777 LLC as part of the India-based carrier's ongoing bankruptcy proceedings. The jet, which was seized by creditors in April 2019, was sold by administrators in the Netherlands to pay creditors.

"The sale of a former Jet Airways 777-300ER by administrators for $9 million is not surprising. First of all, it is a distress sale by administrators of a bankrupt airline," said Mike Arnot, a principal of Juliett Alpha, a communications firm in the aviation industry. "Second, to our knowledge, the aircraft is in below-average condition, with its airframe and engines in need of heavy maintenance, and third, the overall market for twin-aisle aircraft is still very soft due to travel restrictions and the stagnation of long-haul traffic."

My own history with the Boeing 777 goes back to June 7, 1995, when launch customer United Airlines had one on display at Washington Dulles International Airport (IAD) on its way to the Paris Air Show. I was there with dozens of media and guests.

Boeing media representatives were there showing off the unique aspects of United's $122.5 million 777, including being the manufacturer's first fly-by-wire jet and the first-time use of composites in the engine nacelles, parts of the wing and the horizontal and vertical stabilizers. At the time, the 777 was also touted as a jet with more range and payload, better aerodynamic efficiency and lower fuel costs thanks to fuel efficiency enhancements from its Pratt & Whitney PW4000 engines.

Interiors featured LED colored lighting for different phases of flight, inflight Wi-Fi and a combination telephone, video recorder, television, intercom, compact disc player, video game, computer link, fax station, shopping kiosk, telecommunications device for the deaf and credit card scanner built into each seat and controlled from the armrest. At the time, United boasted that its 777 had the widest seats, the largest overhead storage bins and some of the widest aisles of any jets flying at the time.

Related: The Boeing 777 turns 25. Here's why it has become so popular

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As of Sept. 8, there have been 1,673 777s built, of which 1,127 are in service, 412 are in storage, 381 are on order and 127 retired, according to Cirium.

United Airlines had 96 in its fleet at its peak. And Delta Air Lines retired its 18-strong 777 fleet in October 2020, due to the pandemic and a shift to the Airbus A350. Other airlines retiring their 777 fleets include Qatar Airways and Etihad.

Related: When it's time to retire that airplane, how do airlines decide what to let go?

At this age, the majority of a Boeing 777's value is in its maintenance condition, said Arnot. "These aircraft are extremely expensive to maintain, and also to transition from one airline to another. An engine overhaul can cost up to $13 million (each) while an interior reconfiguration can cost $15-20 million," he explained. "If the buyer wants to convert the aircraft to a freighter they would have to spend even more, with no conversion slots available until 2024."

So a buyer looking to keep the aircraft flying would have to spend between $45 million and $60 million on top of the purchase price, said Arnot. "Their other option is to tear down the aircraft and use it for spare parts. But since engines are run-out, they are not worth much, and the only value lies in the resale of the airframe and engine components that are still serviceable and in demand."