Boeing parking jets around Puget Sound, the desert as buyers struggle
They look like ghost airplanes and they are a bad $300 million omen for the airplane business. Two brand new Boeing wide-body freighter...
Seattle Times aerospace reporter
They look like ghost airplanes and they are a bad $300 million omen for the airplane business.
Two brand new Boeing wide-body freighter jets painted all white are parked at Paine Field outside the Everett assembly plant.
Two more freighters freshly painted in the colors of China Southern and worth another $300 million flew this week not to Asia, but to a jet parking lot in the Arizona desert.
Meanwhile at Boeing Field, three 737 single-aisle jets have been parked outside for many weeks awaiting delivery to Arik Air, of Nigeria. Next to them is a completed but idle AirTran 737.
And in Renton, outside Boeing's single-aisle assembly plant, two 737s originally ordered for a Chinese airline are now repainted in the livery of a Dubai-based airline that doesn't start service until June.
Because of a global downturn in air traffic, with the airfreight sector particularly hard-hit, many airlines don't need new jets. In some cases, they can't use the planes they have committed to take from Boeing.
Boeing insisted Friday that even the all-white airplanes are not technically "white tails," industry jargon for planes that have been built but don't have a customer to take them.
"We have no white tails," said Boeing spokesman Jim Proulx. "We have not built any airplanes that are not designated for delivery to customers."
What Boeing clearly does have is customers in distress and some airplanes sitting as expensive excess inventory far longer than the plane maker would like.
The idle 777s are a major reason why Boeing announced last week it will cut production of the jet from seven to five per month from the middle of next year.
One of the ghostly white-painted jets in Everett is a 777 freighter owned by Air France. The list price is $256 million, though according to data from airplane valuation firm Avitas, after discounts it has a value of $150 million.
The second is a 747-400ERF cargo jet ordered by LoadAir, a Kuwaiti airfreight company. Its list price is $253 million, worth about $147 million after discounts.
A second LoadAir 747 freighter, the last 747-400 that will ever be built, rolled out of the Everett factory Thursday and will join its all-white twin.
"Those 747s for LoadAir are on target for delivery in September," Proulx said.
In February, Air France took delivery of the first 777 freighter off the line and a second one days later.
The carrier has yet to decide whether to store the third 777, an Air France spokeswoman who asked not to be identified told Bloomberg News.
Painting the plane white perhaps is to leave open the option of leasing it to someone else.
The airline said in February it will defer delivery of two more 777 freighters to sometime between 2010 and 2012.
As for the two China Southern 777s now in Arizona, the airline hasn't yet accepted delivery of the 777s. They were stored by Boeing, an airline executive told Bloomberg News on Friday from Guangzhou.
Boeing declined to comment on whether the aircraft have been put in storage.
Saving $1 billion
China Southern, the nation's biggest carrier, said this week it will save $1 billion this year by delaying aircraft deliveries.
It will delay delivery of the two 777s until the end of this year or early 2010 and is discussing the timing of two more planes now in production, the airline executive said.
"We're working with them on their delivery schedule," said Boeing's Proulx.
"The fact that two of the largest cargo operators in the world are parking brand-new freighters is a sign of just how awful the global airfreight numbers are," said Douglas Runte, managing director at Piper Jaffray Cos. in New York, in an interview with Bloomberg.
Global air-cargo volumes will probably fall 5 percent this year, outpacing a 3 percent decline in passenger traffic, the International Air Transport Association said last month. The 737 jets at Boeing Field and Renton are passenger jets.
Delivery this month
When asked about Arik Air's parked 737s last month, the airline's managing director, Michael McTighe, said they were being phased in and would be delivered by the end of this month.
He insisted that Nigerian aviation is not as affected as elsewhere and "Arik Air is set for major expansion throughout West and Central Africa."
But at least two of the planes have been parked at Boeing Field for more than two months, creating a financial holdup for Boeing.
Airlines generally make down payments when they sign purchase agreements and then pay the rest to Boeing upon delivery.
The AirTran jet parked beside the Arik Air jets may also be slow to deliver.
AirTran has cut back its fleet plans and either deferred or sold 47 of the Boeing jets it ordered. That includes two 737s it sold to Arik in 2007.
And Boeing was forced to look for a new customer for two 737s in Renton originally destined for delivery to OK Airways, a private Chinese airline.
The Chinese government suspended OK's service in December. The two jets are painted in the colors of FlyDubai, which doesn't begin operating until June.
Boeing said the two airplanes are parked waiting for refitted interiors.
Dominic Gates (206) 464-2963
Copyright © 2009 The Seattle Times Company
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