Delta Air Lines Co. (NYSE: DAL) CEO Richard Anderson admitted on Thursday that he was wrong about being able to buy a used 777 passenger plane for $10 million. According to a report at Bloomberg News, Delta tweeted Anderson’s comments at an investors’ presentation:
I was wrong when I said used 777s were on market for $10M. It was actually $7.7M. We just signed a letter of intent to buy one.
Boeing Co. (NYSE: BA), makers of the 777, declined to comment on the Bloomberg report.
Boeing shares, which had bounced higher based on announced commitments and sales worth around $11 billion, fell from nearly $150 to about $146 before closing the day at $145.56, down 1.7%.
The aircraft maker’s problem is that a large number of different models of the 777 are coming off lease soon and that the market for used versions may kill the company’s hopes of adding orders for the new 777s. A new 777-200ER carries a list price of $277.3 million, and the larger 777-300ER carries a list price tag of $339.6 million. Even adding in cabin reconfiguration costs of roughly $20 million, a 777-200ER that is around 10 years old and sells for $7.7 million is a bargain anyway you look at it.
As we have noted before half the 777s that Boeing has sold to date are being flown by just 19 airlines. Delta’s current fleet includes just 18 of the planes, while Emirates flies 151 of the wide-body jets.
Through November, Boeing had taken orders for just 38 new current versions of the 777 compared with targeted sales of 40 to 60 new orders for the plane in 2015. Having used 777s hit the market at a shockingly low price has got to have an impact on Boeing’s plans for production of new planes and the transition to a 777X.
Boeing’s stock traded down about 1.1% Friday morning at $144.00 in a 52-week range of $115.14 to $158.83.