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  • Delta order for 737-900ER boosts residual values and creates future lease market
    Posted by Leithen Francis 2:23 AM on Aug 26, 2011

    Delta Air Lines' decision to order 100 Boeing 737-900ERs is a huge boost for the type.

    The 737-900ER has many positive product attributes, but it has struggled to generate sales for Boeing, putting a question mark over the program's future.

    This order from Delta changes that - it could help the 737-900ER gain wider market acceptance and, as a consequence, higher residual values.

    I wrote a story in July for Aviation Week's AWIN online subscription news service that Indonesia's Lion Air replaced 12 of its 737-900ERs on order with 737-800s. The reason it did this is because it wanted to do a sale leaseback on 12 aircraft and the aircraft leasing community shied away from the 737-900ER as very few carriers operate this type. A total of 308 have been ordered so far, of which 93 have been delivered. Of this Lion Air has received 47 and Continental Airlines has received 33. Lion and Continental still have 119 and 19 on order respectively. But Boeing really needed this Delta order to broaden out the type's customer base.

    Having very few operators, is a major concern for lessors because they need to have a broad customer base so as to place aircraft quickly and with minimum risk.

    Now that Delta has signed on, it will help increase the residual value and boost the future lease market for this type. Delta will likely seek to own, rather than lease its 737-900ERs, but I would anticipate that other airlines will be following Delta and signing on for the 737-900ER.

    Tags: 737-900ER, tw99, AWCOL, Delta, Delta Air Lines, Lion Air

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