Jetrader - September/October 2012 - 45

appraisal

Boeing 787-8
Mark Halsor and Dave Miller Appraiser Candidates Aircraft Information Services, Inc. (AISI) Tel: 949-582-8888 info@aisi.aero

Background
The first Boeing 787-8 entered into service with All Nippon Airways in October 2011 after four years of well-documented delivery delays. The 787 marks the beginning of a new construction standard for the industry that features 80 percent composite construction by volume; bleed-less electric-powered pressurization, anti-ice and air conditioning systems; and 5,000 psi hydraulic systems. Improvements in passenger comfort include reduced cruise altitude cabin pressure, gust suppression, larger cabin windows, innovative interior lighting technologies and a four-fold increase in cruise-flight cabin air humidity. The combination of lighter, stronger, corrosion-resistant composite construction and improved engines from GE (GEnx) and Rolls Royce (Trent 1000) could provide operators with up to a 21 percent reduction in fuel burn compared to the 767300ER. Systems management, from a pilot’s perspective, should be more efficient and precise. Electrically powered systems are generally easier to control (switches rather than valves), are usually lighter, and benefit from having the same power source for control and for display/monitoring. Composite

materials should also provide significant reductions in corrosion-related inspection and maintenance costs over a 787’s life span. The 787-8 is the first model in the product line and is designed to replace 767-type aircraft. The 787-9 will follow with a higher gross weight and increased passenger count, and it is targeted at the 777-200 and A330 markets. The follow-on 787-10, if and when constructed, will most likely target the 777-300ER and A350-XWB market segments.

Market Outlook
Despite supply chain snafus and construction and certification delays, the 787 has been well-received by the industry. To date, 520 of the 787-8s have been ordered with a total of 15 delivered (11 to ANA and four to JAL) as of the end of June 2012. Approximately 35 additional deliveries are scheduled by the end of 2012. The 787-9 has 335 firm orders with deliveries scheduled to begin in 2013. Similar to previous aircraft programs leading the industry to a new technological plateau, Boeing is expected to make more significant improvements to its production processes over the life of

the program. These production improvements will increase the aircraft’s overall performance and will provide value to both Boeing and to operators as the 787 production line matures. Initial deliveries of the 787-8 were test aircraft and other early-production aircraft that were heavier than promised and required months of post production re-work. These aircraft have been heavily discounted, which is typical of early deliveries in a new-aircraft production run. We assume that all aircraft prior to the 66th line position will be delivered at discounts that will not be offered to “clean” production aircraft buyers. Therefore, we will probably see some firmer pricing in the near term. Looking ahead, we expect the 787 to remain in the 40 percent discount-to-list price range. This is a significant premium compared to the 50 percent discount-tolist-prices we have seen for Boeing’s other widebody aircraft. In other words, Boeing may be successful in capturing the newtechnology pricing premium it had hoped to achieve by upgrading from aluminum tube and stringer to the 787’s composite construction.

Boeing 787 Models Compared to Targeted Replacement Aircraft
787-8 Max Takeoff Weight, lbs Fuel Economy (L. per 100 pax-km) * Design Range, nautical miles Passenger Capacity, 3-Class 502,500 2.7 7,685 242 767-300ER 412,000 3.1 5,960 218 787-9 553,000 2.5 8,035 280 777-200ER 656,000 3.1 7,510 314

* 6,000 n.mi. trip, except 767-300ER 3,000 n.mi. Source: Boeing

Value Matrix for Boeing 787-8, July 2012 Delivery, Genx-1B67 Engines
CMV 2012 $ millions 120.71 Base Values, $ millions, Inflated at 2.5% per year 2012 122.94 2013 116.44 2014 110.35 2015 104.67 2016 99.33 2017 94.37 2018 89.72 2019 85.39 2020 81.34 2021 77.58 2022 74.08

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. Jetrader 45


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Jetrader - September/October 2012

Table of Contents for the Digital Edition of Jetrader - September/October 2012

A Message from the President
Calendar/News
Boeing Fine Tunes 20-Year Current Market Outlook
Showers, Sunshine and (Some) Surprises
ISTAT Introduces Farnborough Airshow Chalet
Airline Finance from an Operating Lessor’s Perspective
Q&A: Leonard Kazmerski
State of the Regions: Europe
A Case of Olympic Proportions
Aircraft Appraisals
ISTAT Foundation
International Appraisers’ Program
Advertiser.com/Advertiser Index
Jetrader - September/October 2012 - cover1
Jetrader - September/October 2012 - cover2
Jetrader - September/October 2012 - 3
Jetrader - September/October 2012 - 4
Jetrader - September/October 2012 - A Message from the President
Jetrader - September/October 2012 - 6
Jetrader - September/October 2012 - 7
Jetrader - September/October 2012 - Calendar/News
Jetrader - September/October 2012 - 9
Jetrader - September/October 2012 - Boeing Fine Tunes 20-Year Current Market Outlook
Jetrader - September/October 2012 - 11
Jetrader - September/October 2012 - 12
Jetrader - September/October 2012 - 13
Jetrader - September/October 2012 - 14
Jetrader - September/October 2012 - 15
Jetrader - September/October 2012 - Showers, Sunshine and (Some) Surprises
Jetrader - September/October 2012 - 17
Jetrader - September/October 2012 - 18
Jetrader - September/October 2012 - 19
Jetrader - September/October 2012 - 20
Jetrader - September/October 2012 - 21
Jetrader - September/October 2012 - 22
Jetrader - September/October 2012 - 23
Jetrader - September/October 2012 - ISTAT Introduces Farnborough Airshow Chalet
Jetrader - September/October 2012 - 25
Jetrader - September/October 2012 - 26
Jetrader - September/October 2012 - 27
Jetrader - September/October 2012 - Airline Finance from an Operating Lessor’s Perspective
Jetrader - September/October 2012 - 29
Jetrader - September/October 2012 - 30
Jetrader - September/October 2012 - 31
Jetrader - September/October 2012 - 32
Jetrader - September/October 2012 - Q&A: Leonard Kazmerski
Jetrader - September/October 2012 - 34
Jetrader - September/October 2012 - 35
Jetrader - September/October 2012 - 36
Jetrader - September/October 2012 - State of the Regions: Europe
Jetrader - September/October 2012 - 38
Jetrader - September/October 2012 - 39
Jetrader - September/October 2012 - A Case of Olympic Proportions
Jetrader - September/October 2012 - 41
Jetrader - September/October 2012 - 42
Jetrader - September/October 2012 - 43
Jetrader - September/October 2012 - 44
Jetrader - September/October 2012 - Aircraft Appraisals
Jetrader - September/October 2012 - 46
Jetrader - September/October 2012 - 47
Jetrader - September/October 2012 - ISTAT Foundation
Jetrader - September/October 2012 - 49
Jetrader - September/October 2012 - 50
Jetrader - September/October 2012 - International Appraisers’ Program
Jetrader - September/October 2012 - 52
Jetrader - September/October 2012 - 53
Jetrader - September/October 2012 - Advertiser.com/Advertiser Index
Jetrader - September/October 2012 - cover3
Jetrader - September/October 2012 - cover4
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