Last Tuesday Delta CEO Ed Bastian responded to an employee question in an ‘Ask Ed Anything’ video about whether the airline would ever acquire used Boeing 777s.
Delta created a lot of controversy 3 years ago when then-CEO Richard Anderson claimed the airline would buy a used Boeing 777 for $7.7 million. He claimed there was a ‘huge bubble’ in used widebodies and that a 10 year old Boeing 777-200 was worth about $10 million.
Boeing pushed back hard on the idea that their aircraft were worth so little. Others defended Delta’s claim.
And a funny thing happened. We never actually saw Delta buying used Boeing 777s. There was speculation at the time that there must be an airframe somewhere in poor condition, without engines, that was essentially going to be scrapped for parts at the kind of prices Anderson, now head of Amtrak, was talking about.
And Bastian finally concedes this was the case.
We had looked at 777s for part out, which means we buy the 777 and then we carve it up and use the pieces. The pieces are actually more valuable than the aircraft itself given the age of the aircraft.
There had been some numbers floated around that maybe we could pick up 777s for about $10 million. That wouldn’t be $10 million to fly it, that would be $10 million to carve it up and use it for parts on our existing fleet of 777s.
We’re always opportunistic in the marketplace but I don’t think you’re going to be seeing any used 777 purchases any time soon.
Translation: Bastian’s predecessor was talking smack but couldn’t walk the walk.