ANALYSIS: The Boeing 777-200ER aircraft report

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Boeing initially conceived the 777 series as a stretched version of the 767 variants but the manufacturer instead opted for an all new design, which features a unique fuselage cross section, fly-by-wire, advanced flight deck and superior engines.

The 777 was launched in 1990 and was offered in three versions:

- the basic 777-200, initially the 777-200A version, with a maximum take-off weight of 506,000 to 545,000 lb.

- the increased weight longer range 777-200ER, the B-market version initially called the 777-200 increased gross weight (IGW). The aircraft features the same dimensions as the -200 and same capacity. However the maximum take-off weight was increased to 655,000 lb, allowing a range of 7,700 nautical miles (nm).

- The 777-300 features a 33 feet 3 inches longer fuselage than the -200 variants. Maximum take-off weight was extended to 660,000 lb. for a 5,955nm range.

The first -200ER was delivered to British Airways in February 1997.


United Airlines, All Nippon Airways, British Airways, Japan Airlines and Cathay Pacific Airways were among a number of carriers to hold early discussions to define and develop the 777 configuration. The participating airlines represented a full range of operators with varying route structures, traffic loads and service frequency.

The 777 provides most payload and range capability and growth potential in the medium-sized aircraft category.

The -200ER is capable of long range routes such as London-Los Angeles, New York-Dubai, Tokyo-Sydney. In terms of payload it competes in the 300-seat market segment with the out-of-production Boeing MD-11 and A340-300 variants. The type also competes most directly with the in-production twin-engined A330-300 high gross weight aircraft.

The 777-200ER in-service fleet consists of 414 units, according to Flightglobal's Ascend online database. Another four are in storage: two 2001-vintage aircraft previously operated by Egyptair, one 1999-built ex-Malaysia Airlines as well as one 1999-vintage aircraft previously with United Airlines.

Current orderbook includes two scheduled deliveries to All Nippon Airways and one to Asiana Airlines.

The first 777-200ER was withdrawn from permanent service earlier this year after ILFC purchased the 1999-vintage aircraft from Singapore Airlines in January.

Rolls Royce is the engine market leader on the programme with a total of 166 aircraft, followed by General Electric with 160 machines. Pratt & Whitney accounts for the remaining 92 units.

General Electric is the market leader in Europe with an estimated 73% market share. The US engine manufacturer also lead in Africa and Middle East with 59% or 29 aircraft powered.

Rolls Royce leads in the Asia-Pacific region with 49% market share or 70 aircraft. The UK engine manufacturer also powers 56 aircraft in North America representing a 49.5% market share. 


Pratt & Whitney has a strong presence in Asia Pacific with 33% or 47 aircraft. The engine manufacturer also powers 31% of North America's fleets.

The Asia Pacific region is the largest market for 777-200ER applications with 142 units, or 34% of the total number of aircraft.

North America accounts for 113 aircraft with four operators, or 27% of the total fleet. Europe follows with 110 units with eight operators. There are 49 777-200ERs in Africa and Middle East while Latin America and Caribbean accounts for the remaining four units.

Top 777-200ER operator remains United Airlines with an estimated 55-aircraft fleet. American Airlines operates 47 aircraft while British Airways has 43 units in its fleet. Singapore Airlines and Air France operate 31 and 25 aircraft, respectively. With a total of 35 operators, the type is relatively liquid in remarketing terms.

ILFC is the most exposed leasing company to the 777-200ER type. Ascend says about 37 aircraft are managed by ILFC. General Electric Commercial Aviation Services (GECAS) has 12 aircraft.

There has been a limited activity and availability so far in the 777-200ER programme and the true test will come when top operators start their fleet replacement programmes.

Singapore Airlines was the first carrier in 2011 when it placed some of its aircraft to budget subsidiary Scoot on six to eight hours missions.

A secondary market is starting to develop with Royal Air Brunei mainly replacing its 767 fleet with ex-Singapore Airlines aircraft. Transaero Airlines has also taken ex- Singapore Airlines 777-200ERs while Russia's Orenair has leased one ex-Air Austral aircraft from ILFC.

Demand for new aircraft is limited as operators favour the higher density aircraft 777-300ER.

The next generation of widebody aircraft, such as the 787 and A350-900 are targeting 767s and A340 product mainly but the 787-10X is expected to be launched as a direct replacement for the 777-200/200ER programme.

Trader sources says early vintage aircraft have been offered in the marketplace for $20 million.

ICF SH&E Angus Mackay says the 777-200ER has until recently proved particularly popular with operators partly at the expense of the predecessor 777-200 variant. "The combination of twin-engine economics and strong payload/range capability has provided operators with a high degree of operational flexibility during challenging market conditions and the operating economics for the 777-200ER are compelling on longer sectors for which traffic demand does not justify larger Boeing 747-400 or Airbus A380 aircraft," says Mackay.

Mackay says orders have waned significantly to only four aircraft as market sentiment has moved to the larger 777-300ER version and to some extent the A330-300 high gross weight aircraft; the latter able to fulfil most 777-200ER missions at lower operating costs. "Market values and lease rates have declined in concert, with those low gross weight aircraft used on short sectors suffering most due to relatively high flight cycle accumulation compared to long haul operations. Given the current product life cycle exceeding 16 years, further challenges will be also presented with the arrival of the Boeing 787-10 and the Airbus A350-800 XWB when those aircraft begin to arrive in the middle of this decade."

Ascend says Boeing is studying the development of the 777-200ERBCF and may launch the programme this year. Conversions could start in 2016/17. The freighter aircraft would feature an 80 tons capacity with a 3,900 nautical miles range which could complement the higher weight and longer range factory built -200F variant and act as an MD-11F replacement. As with main conversion programme, the main issue is residual values as well as conversion price. Ascend says the conversion itself is likely to cost over $30 million, and the product may suit high volume, medium/long-range integrators.

ICF SH&E is not convinced by a potential freighter conversion. "The complexity of such a programme, the lack of feedstock at economic levels and the relative inefficiency of the converted passenger aircraft compared to the Boeing 777-200F suggest that few orders are likely in the present economic environment," says Mackay.

Tom Burke of MBA says the future is not at all promising as this aircraft is not a good candidate for passenger-to-freighter conversion. "The MTOW limit would allow for a 55 tons capable freighter, while the 777-200F is a 100 tons freighter," he says.

Lease rates and current market values

Appraisers looked at a Boeing 777-200ER, powered by PW4090 engines, with a 632,500 lb maximum take-off weight (MTOW).

"The Boeing 777-200ER is one of the most widely produced 777 variants to date, with a similarly wide operating base. However, there is a large variance of specifications, engine options and years of build combinations to consider, which explains the large value variances seen by the type. There have been a few returns recently that have highlighted the difficulty in re-deploying an ageing leased twin-aisle aircraft into the current market. Consequently, our lease rates for older variants have been reduced," says IBA Group's senior analyst Alice Gondry.

Gondry expects a 2012-vintage aircraft to lease at just under $900,000 a month while its current market value of $105.8 million.

Ascend's lease rate is similar to IBA for a one-year old model and current market value is $101 million.

Collateral Verifications has a $900,000 monthly lease rate but puts a current market value at $86.25 million.

MBA says lease rate range from $875,000 to $900,000 a month. Its current market value is $109.8 million. Burke says the aircraft is nearing the end of production run and we see values and lease rates dropping." There were no deliveries in 2011, the orders have dried up, and the backlog is small."

ICF SH&E has a wider lease rate range with $815,000 and $935,000 a month. The appraiser estimates a one-year old current market value at $105.9 million.

A five-year old model has a lease rate of between $700,000 and $820,000 a month for ICF SH&E, $680,000 to $760,000 for MBA.

IBA monthly's rental is $770,000, Collateral Verifications has $800,000 while Ascend's is the lowest of the three with $740,000 a month.

A 2004-vintage old aircraft has a lease rate of between $575,000 and $705,000 a month for ICF SH&E, $570,000 to $650,000 for MBA. Ascend's and IBA have a similar monthly lease rental with $640,000 while Collateral Verifications says the lease rate is $700,000 a month.

A 2000-vintage aircraft has a lease rate of between $450,000 and $580,000 a month for ICF SH&E, $480,000 to $565,000 for MBA. Ascend's monthly lease rental is $555,000 IBA has $515,000 while Collateral Verifications has $600,000 a month

A 1996-vintage aircraft has a lease rate of between $400,000 and $500,000 a month for ICF SH&E, $440,000 to $520,000 for MBA. Ascend's monthly lease rental is $490,000 while IBA has $450,000 a month. Collateral Verifications says the lease rate is approximately $500,000 a month.

Current market value for early models range from $30.6 million (Collateral Verifications) to $38.9 million (MBA). ICF SH&E values a 1997-vintage at $39.8 million.

Ascend and Collateral Verifications have a similar opinion on a 13-year old aircraft with $41.5 million and $41.9 million current market values, respectively. MBA has $46.7 million, while ICF SH&E has $47.5 million current market value. INBA is the highest with $48.13 million.

Ascend is the lowest appraiser on a 2004-vintage aircraft with a $52 million current market value. The remaining four appraisers are within a $4 million range with Collateral Verifications at $57.4 million, $60 million for MBA, $61.3 million for ICF SH&E and $61.5 million for IBA.

ICF SH&E is the highest on a 2008-vintage aircraft with $80.1 million followed by MBA with $79.1 million. IBA and Collateral Verifications have $75.9 million and $73.7 million, respectively while Ascend has a $69 million current market value.