Boeing launched the 757 programme in the first quarter of 1979 with a view to replace the successful three-engined 727 models.
The 757 was developed alongside the larger Boeing 767. Both types share a number of systems while the flightdeck is almost identical allowing a common pilot type-rating between the two aircraft.
The first 757-200 rolled out 29 years ago this month and was first delivered to launch customer Eastern Airlines in December 1982, after receiving the US Federal Aviation Administration certification. Eastern Airlines placed the aircraft into revenue service in January 1983, the month the British Civil Aviation Authority certified the 757-200 model.
Boeing rounded up its 757 programme, which reached 1,050 deliveries, with the final delivery to Shanghai Airlines in November 2005.
An estimated 1,098 Boeing 757-200 passenger orders were placed and Boeing delivered a total of 995 aircraft to customers. According to Flightglobal's ACAS database, there are 780 757-200 passenger aircraft in service with an estimated 89 aircraft parked.
According to Flight's ACAS database, a total 379 aircraft are owned by operators, another 380 aircraft are on lease terms, leaving an estimated 21 aircraft on sublease contracts. The average fleet age was 17.0 years of age.
Rolls Royce's RB211 engine family represents 426 aircraft: 232 RB211-535E4-powered aircraft, 191 aircraft equipped with RB211-535E4B engines and three RB211-535C-powered aircraft. Pratt & Whitney represents 354 aircraft: 272 aircraft equipped with PW2037 engines and 82 PW2040-powered aircraft.
The North American region the principal market for the 757-200 fleet and Airbus is pushing its A321 equipped with sharklets as a replacement.
The European manufacturer is confident that performance upgrades in the pipeline for its single-aisle family will give its largest model a sufficient range boost for a genuine shot at the huge 757-200 replacement market. Chief operating officer for customers, John Leahy, believes that the new 'sharklet' winglets, which will provide a 3.7% reduction in fuel burn and around 220km (120nm) more range on the A321 from 2012, means there are "great opportunities to replace the 757-200".
North America represents more than two-thirds of the 757-200 passenger market, with several large fleets operating with US carriers including American Airlines, Continental Airlines, Delta Air Lines and United Airlines. The latter is still in a fleet renewal evaluation for its 96 aircraft, despite its merger with Continental Airlines.
US Airways says in the second half of last year that it was continuing to look for replacement 757s for specific missions such as the Phoenix-Hawaii pairing and some international flights from Philadelphia. A few days ago, chief executive Doug Parker said of the 757: "That airplane can fly missions that no other airplane can fly and they're going to need to be retired at some point." US Airways currently operates 24 757-200s. Nine of those aircraft have build years in the 1980s - one in 1983, two in 1985, three in 1986 and three in 1989. The two youngest aircraft in US Airways 757's fleet were built in 2000.
Delta has issued a request for proposal to manufacturers for the replacement of 100-200 narrowbody aircraft. The carrier is looking to replace the A320s, 757-200s and DC9-10s beginning around 2013. Delta currently operates 69 A320s, 34 DC9-50s and 167 Boeing 757-200s.
The 757, which is slightly larger that the A321, has always had superior payload-range, but the sharklet upgrade gives the Airbus single-aisle "true US transcontinental range capability", according to Leahy.
Airbus says the sharklet-outfitted A321 will be able to operate between Boston and San Francisco or San Francisco and Hawaii, with maximum passengers - similar to routes flown by the US 757 operators - but with a 17% per seat fuel burn advantage, based on a 185-seat A321 and 192-seat 757-200.
Equipped with Aviation Partners Boeing winglets, the 757 has a range of 8,300 km, which is around 2,600 km more than the current A321, giving it transatlantic range.
Last year Airbus vice-president for customer affairs Andy Shankland conceded that the primary focus centres on US transcontinental routes as transatlantic routes flown by some US 757 operators are beyond the capability of the A321.
Collateral Verifications says the current demand, specifically from the US majors, has given the 757 some much needed stability. "We expect this trend to continue in the foreseeable future. With the improved health of both the passenger and cargo market, we fully expect that younger aircraft will continue to fly in passenger service whilst older aircraft may either be converted to freighters and/or parted out. Although several carriers have shown interest in replacing the type with newer more efficient aircraft, we do not believe that this will happen overnight which should help the type regain some of its lost value as well as continue to strengthen monthly lease rentals."
The low cost acquisition price has also created some markets for the 757. In March 2010 Allegiant Travel Company signed an agreement to acquire six used 757-200s to support expansion plans into Hawaii. "Operators such as Allegiant Air are basing their business model on the type, as they represent a low capital cost," says IBA Group.
Jazz unveiled a five-year agreement with Thomas Cook last April, which sees the Canadian carrier operate five 757-200s to various destinations in the Caribbean, Mexico and Central America from Toronto, Ottawa, Halifax and Montreal.
"Despite the ageing technology with an average fleet age of 20 years, there is still no other aircraft competing with the type and as such the 757-200 is still very much operational with 95 operators," says IBA Group.
CMVs and Lease Rates
The 757 has greatly benefited from a non-real direct competitor but it is now experiencing a decline as operators now look at more advanced alternatives. The Airbus A321 and Boeing 737-800 models are lower capacity aircraft and probably match better the operator's requirements.
The limited interest of replacement aircraft has benefited the type over the years but the 757 has also experienced few rebound, sitting between an increasing number of MD80 coming up in the market and a lack of available 737-800s.
The performance of the 757, in terms of lease rates, was considerable in the 2005-08 cycle. At the bottom of the cycle, some aircraft leased for around $100/120,000 a month. Three years later, these aircraft were $190/210,000 a month. Since, lease rates not much gone down because Fedex and other cargto operators have hoovered a lot of aircraft. One trading source tells CAO that 10/12-year old aircraft would lease in the $210,000 range with a good credit airline. Lease rates can go up to $225,000 a month.
"During the last 12 months, Collateral Verifications has seen values drop for the type by less than 10% with lease rentals remaining fairly steady for the type. With the industry recovery under way, we feel that this may bring some additional stability to the type and Collateral Verifications expects to see some increases in lease rentals in the next 12 months due to the lower availability and increase in demand.
Many transactions in the market are with leases attached. CAO recently saw a 20-year old aircraft being acquired for almost $9 million with a medium-term monthly lease in excess of $175,000. Another transaction, involving a 1995-vintage aircraft was sold in the region of $11 million with a long-term lease attached.
A 10-year old aircraft without a lease attached would sell in the $17/18 million range.
Last year AerCap agreed to sell two 1992-vintage aircraft at $15.4 million to Avia Asset Management, but the transaction failed.
In June 2010 British Airways (BA) revealed that it booked £30 million ($44.2 million) through the sale of five 757s powered by RB211-535E4 engines.
Last November Delta retained the services of Aircraft Information Services, Inc. (AISI), BK Associates and Morten Beyer & Agnew (MBA) for its $474 million Pass Through Certificates, Series 2010-2A, which included seven 757-200s equipped with PW2037 engines.
Six aircraft were built May and September 1996 and received valuations between $16.44 million and $16.88 million for AISI, between $16.63 million and $17.04 million for MBA, while BK Associates had valuations between $19.55 million and $20.41 million.
The March 2001-vintage aircraft received a valuation of $16.51 million by BK Associates, $19.55 million by AISI and $22.25 million by MBA.
IBA says a 1986-vintage aircraft has a current market value (CMV) of $6.57 million. Avitas's CMV is at $6.7 million. For the same vintage Collateral Verifications has a $5.7 million CMV while MBA has a $5.95 million CMV.
A 1991-vintage aircraft commands a CMV of $9.08 million for IBA and $9.50 million for Avitas. Collateral Verifications says the CMV is $8.67 million while MBA is the lowest of the four appraisers with a $7.86 million CMV.
The three appraisers are closer on a 1996-vintage aircraft. MBA has a $11.77 million CM, IBA values the aircraft at $12.24 million, Collateral Verifications has a $12.73 million CMV while Avitas has a $13.4 million CMV.
A 10-year old aircraft has a CMV of $16.54 million for Collateral Verifications, while IBA has a $16.53 million CMV. MBA has a $17.63 million CMV while Avitas is the highest with a $18.50 million CMV.
A 2005-vintage aircraft has a CMV of $21.88 million for IBA, $22.50 million for Avitas while Collateral Verifications has a $20.75 million CMV. MBA is the highest with a $24.1 million CMV.
Lease rates vary between $110,000 and $200,000 a month for IBA and Avitas. Collateral Verifications says monthly lease rentals are in the $115,000 and $265,000 a month range.