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Analysts Remain Bullish on Boeing After Delta CEO Comments

Delta Air Lines Co. (NYSE:DAL) CEO Richard Anderson sparked a sell-off of shares in Boeing Co. (NYSE: BA) on Wednesday, following his comments on the number of wide-body airplanes that are about to become available in the second-hand market. In a conference call, Delta indicated that it is seeing prices for nine- to 10-year-old 777-200s for around $10 million from more than one seller, and that is creating a buyer’s market that Delta expects will only get better over time. Delta also noted that lease rates on the Airbus A330-200 are a fifth of what they have been, and it believes the pressure in the wide-body market will spread to the narrow-body market.

Now a Boeing 777-200 for $10 million is a good deal. In 2001, when the 777-200 was in its sixth year of production, a new plane had a list price of $152 to $171 million. We noted Thursday that at least one 777-200ER, a 2007 version of the aircraft with more fuel-efficient engines and a longer...