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Aviation History
1974
1974 - 0006.PDF
[FDJHMKnT Airliner price index FLIGHT International, 3 January 1974 No. 9 WHAT is THE PRICE OF A SECOND-HAND non-fan jet airliner in the light of the present fuel crisis? One might as well ask the length of the proverbial piece of string. No-one really knows, although in this article Flight makes an assessment. More than one airline is anxious to dispose of these aircraft which could rapidly become an operating liability. There has already been "dumping" of such equip ment and the bottom may fall out of the market in the next two or three months. Furthermore, with service cut-backs the world over there could be a short-term surplus even of some modern aircraft and prices could fall. This Flight analysis presents new prices mainly from manufacturing sources and second-hand data based on in puts from the broking industry, manufacturers and airlines. The data presented in the main table (opposite page) for second-hand aircraft leans heavily on prices suggested by brokers and represents a starting point for negotiation. One major US manufacturer regards the prices we quote as universally too high, while another comes down in broad agreement, as do experts from major airlines with whom Flight is in touch. The airline inputs, however, tend to be slightly less than dispassionate when they involve types on hand or wanted by the airline concerned. Since the last Flight Airliner Price Index was published on June 14, 1973, page 917, there have been few drastic changes to new-aircraft prices, although Boeing has noti fied us of increases for its complete range. The dollar de valuation and the vagaries of the floating currency exchange rates, however, have caused headaches for Euro pean manufacturers. For instance Airbus Industrie offers the A300 on the US market at $3 million below the cheapest TriStar and DC-10, and in the current circum stances this really bites into the profit margin. But the alternative is to give up and keep out of the market. Used aircraft prices have been subject to the usual fluctuations. Pure-jet Caravelle 6Rs are available in reasonable num bers and the price has come down from $600,000 to $450,000. There is a very small market for non-fan Series 120 Boeing 707s, and they can be bought for $500,000 to $750,000. But the 320 Series non-fan aircraft have been becoming valuable because of the scarcity of fan-engined 320Bs and Cs. The fuel crisis might very well reverse this trend for 320s, but the brokers' suggested average price is now $1-2 million. A manufacturer close to the second-hand market quotes $1 million and notes that several are avail able for negotiation. The top price for a fan-engined 720B has reduced slightly to $2-2 million since our last price index but some sources stick to our earlier $2-5 million top limit. About 20 non-fan 720s are on the market and our earlier price of between $200,000 and $500,000 still holds good, with the emphasis probably on the lower end of the range. Paralleling the surge of airline orders for the Advanced 727-200 during the year, demand for second-hand 727s is high. The price has hardened very quickly as aircraft have become extremely scarce. The average price for a 727il00 is now no less than $3 million and ranges up to $3-8 million, according to brokers, while another source suggests prices of between $2-8 million and $3-7 million. An airline quotes from $3-3 million to $3-6 million for the standard aircraft and between $3-8 million and $4-2 million for the QC variant. The 727-200 is not available on the second-hand market but if it were the price would probably be between $4-8 million and $6 million—one airline suggesting $5 • 5 million. Demand for the 737-200 is also great and prices have hardened towards $4 million from $3-5 million, with a dis passionate airline quote of $4 • 1 million. A manufacturing source suggests a price of $2-5 million for good 737-100s, which are also scarce at the moment. The biggest bone of contention over our last price index concerns the 707-320B/C. We quote $5-5 million to $7 million, with very few used aircraft available. A major airline notes that the only two 320Cs on offer at the moment, are going for $5-9 million and $6-5 million. It is rather misleading, however, to quote an average second-hand value because the aircraft was being manu factured in 1963 at an original purchase price in the order of $6 • 5 million fully equipped. It is still being built in 1974 at a fly-away cost of approximately $11-5 million. However, with the latest avionic equipment and airframe modifica tions, sophisticated flight systems, inertial navigation and -7 engines, it has a far greater potential second-hand value than the 1963 variant. A very recent purchase went through in the United States at a quoted $8-2 million for aircraft and limited spares support. A spare QEC JT3D-3B is worth approxi mately $350,000 and, assuming ground and flight training, it is possible to reach this price, assuming the aircraft were manufactured in, say, 1969. Such a figure would be a most unrealistic price if the aircraft were manufactured in, say, 1964. The bottom-end second-hand value of a 747 is now down at $17-5 million according to brokers, with $17 million quoted by a potential customer airline for a three-year-old aircraft. People on the other side of the trading fence quote $19 million to $23 million. About a dozen 747s are up for sale and lease, according to Boeing. Other aircraft whose second-hand broker price varies from our previous quotation include the F.28 (four air craft available at $3-6 million each) and the DC-8-63F— down at $9 million but very scarce. An airline still quotes $10-5 million to $11 million for the latter type. A good used DC-9-30 would probably cost $3-5 million if any were available. One-Eleven prices quoted to Flight vary considerably and reflect both sides of the commercial fence, the lowest broker price and the highest airline quote varying by a factor of more than three for a 200 Series aircraft. Retro spective noise legislation in the United States, Britain and probably many Icao contracting states could have an effect on the resale price of this and many other jets designed in the early 1960s. On the new-aircraft front the only significant new entry is the HS.146 feederliner costing $4-4 million at 1973 prices, slightly more than a standard F.28. SECOND-HAND QUOTE VARIATION (SELECTED AIRCRAFT) Aircraft 707 non-fan 720 non-fan 720B 707-320C 727-200 737-200 747 One-Eleven One-Eleven One-Eleven Convair 880 DC-8-30 DC-8-50 DC-8-S5 DC-8-60 non-F var DC-8-S3F Broker $750,000 to $1 -2 million $200,000 to $500,000 $1 -5 million to $2 2 million $5-5 million to $7 million $4-8 million to $6 million $3-5 million $19 million to $23 million 200 $250,000 lo $500,000 400 $1-6 million 500 ant Up to $3 million $300,000 $700,000 to $1 -2 million $1 -5 million $4-6 million (F variant) $8-5 million $9 million Aircraft company $1 million $200,000 to $500,000 $1 -5 million to $2-5 million $5-5 million $7 million $4-8 million to to $5-1 million $3-5 million $4 million to $19 million to $23 million — — — — — —• — — Airline — $400,000, as adver tised in "Flight" — $5 million to $7 million $5-5 million $3-5 million to $4-1 million As low as $17 million $720,000 to $900,000 $1 -5 million to $1 -8 million $2-9 million to $3-4 million $200,000 $400,000 to $900,000 $1 -2 million to $1 -7 million $4 million to $4-6 million $7-5 million to $9-5 million $10-5 million to $11 million
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