Jetrader - Summer 2014 - 54

appraisal

Boeing 787-9
Fred Klein, President
ISTAT-Certified Senior Appraiser
Aviation Specialists Group, Inc.
Tel: 703-736-9700
Fred@ASGroup.aero

787 Background and Current Market Outlook
The 787 family is comprised of three models, the -8, -9 and -10.
They are twin-aisle twin-engine airliners with the latest available
technology, systems architecture and materials. New construction techniques have been developed to build these airplanes,
and GE and Rolls-Royce developed new engines. It is designed to
offer operators substantial reductions in operating costs, to be
considerably more fuel efficient, lower in maintenance costs and
more environmentally friendly. With large windows and a lower
internal cabin altitude, it is designed to be passenger friendly,
and with a cruise speed of Mach .85, it is fast. All of the 787 versions are designed and sized to take advantage of a continuing
trend toward global route fragmentation. In late 2013, Boeing
received its 1,000th 787 order.
The 787 program was formally launched in April 2004 when
ANA placed the first order. Roll out of the initial family member,
the slightly smaller 787-8, took place on 8 July 2007, and first
flight took place in December 2009. The FAA certificated the
787 in August 2011 and entry into service was with ANA the
following month.
With respect to the 787's technology, here are some notable
points:
* About 50 percent of the structure by weight is composites,
which should reduce maintenance costs and provide improved
passenger comfort.
* The 787 is more heavily electric and does not have a pneumatic
system which reduces the amount of pneumatic ducting, mounts,
sensors, etc.
* The new technology GEnx and Trent 1000 engines will deliver
materially improved fuel consumption, reduced emissions and
less noise.

continue to be large. As of early 2014, the 787-8 and -9 had
tallied over 900 orders from about 40 airlines which represents
very good market mass for a widebody jetliner, especially this
early in its life cycle.
The 787-9's first flight took place in September 2013 and
entry into service is scheduled for mid-2014. It will transport
280 passengers approximately 8,100 nautical miles. In terms of
payload/range, it falls between the smaller 767-300ER/787-8 and
the 300-seat 777-200 family in the Boeing product line.

Value Opinions
The 787-8 and -9 are both brand-new aircraft, so there is no
aftermarket activity to guide the appraiser as to future value
behavior. In such cases, ASG typically looks at three areas:
* The market segment for the aircraft and potential for good
market mass.
* Value behavior of competing aircraft.
* Characteristics of the subject aircraft itself.
Because of its technological advancement, ASG believes
that there are no current airliners directly comparable to the
787, but in terms of payload/range, the 767-300ER and A330-200
are its closest competitors. Both of these jetliners have been
very popular, have built up very good market mass, and in terms
of market demand and long-term value retention, have been
above-average performers. With its improved operating economics, leading-edge technology and already large order book, ASG
believes that the 787-9 will be an above-average performer in
terms of market demand and long-term value behavior.

The 787-9 Model
The 787-9 is what Boeing defines as a small widebody,
(200-300 seats), which includes the 767s, A330s, A350-800 and
787-8/9. That has been a very active market segment over the
years, especially as global markets have experienced increasing
route fragmentation. Boeing's 20-year forecast for 2013-2032
projects that about 4,500 of these small widebodies will be
delivered, which means that the 787's market segment should
Below are ASG's current and future value opinions for the 787-9:
Boeing 787-9 Values as of March 2014, US$ millions
Year of
Build

Current
Market
Value

2014
Base
Value

Future Base Values with 2.0% Annual Inflation
2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2014

132.0

127.0

122.2

117.4

112.7

108.1

103.6

99.1

94.8

90.6

86.5

The aircraft values stated herein are the product and the property of independent third-party sources, and ISTAT neither approves nor endorses the
information contained herein or the use thereof for any purpose whatsoever.
Aircraft specifications: GEnx-1B70 engines, 545,000 lb MTOW
54 The ofﬁcial publication of the International Society of Transport Aircraft Trading

Jetrader - Summer 2014

Table of Contents for the Digital Edition of Jetrader - Summer 2014