SINGAPORE--Prices for Boeing Co. 747-400s, the most popular wide-body plane, are tumbling as carriers rush to replace what were once their flagship aircraft with newer and more fuel-efficient models.
Ten-year-old passenger 747-400s are worth a record low US$36 million, about 10%t less than similar aged planes last year, according to Ascend Worlwide Ltd., amid high fuel costs and a cargo slump that has damped interest in converting aircraft into freighters.
Forty-eight of the 404 humpbacked passenger 747-400s worldwide have also been placed in storage, according to the London-based aviation consultancy, as the once “Queen of the Skies” is shunned for 777s and Airbus SAS A380s.
“There’s not a lot of demand for the 747,” said Paul Sheridan, Ascend’s Hong Kong-based head of risk analysis. “They’re mostly being broken up for parts.”
The decline in prices contributed to Singapore Airlines Ltd having a surprise loss in the quarter ended March after the sale of the carrier’s last 747-400 raised less than it expected.
Japan Airlines Co. has also stopped using the planes, and operators including Cathay Pacific Airways Ltd, Korean Air Lines Co. and Malaysian Airlines System are following suit to help counter fuel prices that have jumped about 30 percent in two years.
“When oil prices are high, you want your new airplane,” Cathay Pacific Chief Executive Officer John Slosar said this week in Beijing. “The last thing you want to do is hold onto your older planes.”
The Hong Kong-based airline said last month that it’s speeding up the retirement of its 21 passenger 747-400s. The carrier plans to shed nine through early 2014 as it adds more 777-300ERs for long-haul flights. Cathay is also retiring three -400 freighters this year because of the arrival of new 747-8 cargo planes. (Bloomberg/tw)