Delta on Rumors of Buying Singapore 777 Jets – “It’s a Buyer’s Market – Waiting for Prices to Drop”

During yesterday’s earnings call, Delta CEO Richard Anderson addressed recent rumors which have Delta buying used 777s from Singapore.  Here’s what he had to say:

Michael Sasso – Bloomberg News
Good morning. Yes, I had there’s kind of the rumor mill has been hot lately about Delta looking at some 777s coming out of Singapore. Can you just talk about that and is there any truth to that?

Richard Anderson – CEO
Yes, I’d be glad to. Well we’re seeing a huge bubble in excess wide-body airplanes around the world and we’ve been approached by more than one party. I mean the market appears to be the 777-200s about 9 to 10 years old the price is about $10 million. And on A330-200 the lease rate is about a fifth of what it would be new.

So we do think that the aircraft market is going to be right for Delta and over the course of the next 12 to 36 months and we think that that weakness in that aircraft bubble in wide-bodies is going to spread to narrow-bodies and that there will be some huge buying opportunities because low interest rates really have created a huge wide-body bubble in the world.

Singapore Airlines, I think has 70 of these airplanes that are coming off lease or being retired that are 8 to 10 years old.

Michael Sasso – Bloomberg News
Just a follow-up. So is there a deal actually in the works or recently completed for?

Richard Anderson – CEO
There’s no deal in the works we just — it’s a relatively small market in the world, right there is not many people in the world that can take a dozen 777s, right, there’s a handful of customers. It’s a very small market, it’s a very transparent market, and we get calls all the time. There is no deal. Prices are going to get lower; you wouldn’t strike a deal now.

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