· The aircraft was acquired by the previous federal administration to
replace the President Juárez Boeing 757-200, with 28 years of service.
· The new aircraft will operate with greater security, functionality and
It was announced that the
José María Morelos y Pavón Boeing 787-8 purchased by the federal administration
will be delivered to the Presidential General Staff in the next few weeks.
The date will depend on the completion of the final tests and on the
certification of the interior equipment by the Federal Aviation Administration
of the United States (FAA).
The aircraft will operate two weeks after its arrival in Mexico, during
which time the training of the crews and ground staff will be completed.
BACKGROUND TO THE PURCHASE
On November 11, 2011, then Interior MInister Francisco Blake Mora, died
in a tragic event aboard a Presidential General Staff helicopter that crashed in Chalco, State of Mexico,
which also killed those accompanying Minister Blake and the crew members.
In the wake of that regrettable incident, in the review of the Expenditure Budget for the Federation for
the 2012 fiscal year, passed on December 15, 2011, representatives urged the
Federal Government “To make the appropriate budgetary adjustments to renew the
aircraft, and the rest of the aircraft assigned to the president, in order to
ensure the safety of the president and his ministers of state.
In response to this request; and on the basis of the technical and
operational evaluation by the MInister of National Defense (SEDENA), as well as
the economic conditions analyzed by the Secretariat of Finance and Public
Credit (SHCP), in November 2012, the National Bank of Works and Services
(Banobras) purchased a Boeing 787-8 aircraft.
The total cost of the aircraft, including engineering, systems installation, structural adaptations,
certifications and a package of spare parts, was $218.7 million USD, paid at
13.5 pesos per dollar, since exchange rate coverage was also acquired. This means that the actual cost, paid in pesos for the entire aircraft
with its equipment, was $2.95 billion pesos.
At the same time as the purchase of the aircraft, Banobras signed a
15-year lease with the federal government, at the end of which the equipment
will become part of the Ministry of National Defense’s assets.
Financial leasing is the instrument commonly used for the purchase of
these assets, allowing payment to be deferred over time and thereby reduce the
budgetary impact at a given time, in order not to affect other areas of
PRESIDENT ORDERS STUDY
In a context of budget adjustment, last September President Enrique Peña
Nieto ordered the Finance Ministry to conduct a study that would provide the
necessary elements to determine, based on technical, financial and national
security factors, whether to sell or keep the B787 -8 for use by the Mexican
In compliance with the president’s instruction, Banobras hired Ascend
Flightglobal Consultancy, an international company specializing in valuation
and advice on buying and selling aircraft.
This London-based company has evaluated over 67,000 aircraft worldwide
for airlines, corporate aviation, air leasing companies and financial
institutions. It has been certified by ISTAT (International Society of Transport
Aircraft Trading), an organization that sets standards and promotes the
sale or purchase of aircraft worldwide.
The scope of the study included the identification of the potential
market for the eventual sale of the aircraft; an assessment of market conditions
and trends; the time expected to make the sale; the likely price at which the
aircraft could be sold and the conditions for its sale.
The main results of the study are given below.
(i) If the aircraft were sold to
a commercial airlines, it would experience very significant loss in relation to
its purchase price. This is due to the cost and time of internal
reconversion, as well as the loss of existing equipment. The consultant estimates that, if sold to a commercial airline, its sale
could represent a loss of more than 58% of its cost (128.2 million dollars). In view of the above, the consultant considers that the aircraft should
maintain its current configuration, rather than being converted into commercial
(ii) If sold with its current configuration on the private aircraft
market, the sale could be completed within 12 to 24 months, given the
characteristics of this market and the complexity of the current economic
context. If sold within 24 months, the loss could amount to 30% of its value
($65.9 million USD) and if sold within 36 months to about 35% (76.2 million
(Iii) The equipment was acquired at an attractive price, since it was
one of the first B 787-8 planes to be manufactured and purchased at a fleet
price. The aircraft (without equipment) had a cost of $114.6 million USD when
its market price-at the time of purchase- was approximately $200 million USD. In other words, it was purchased at a discount of 42.7%.
(Iv) The cost of adjustments, including engineering, installation of
systems, structural adaptations, cabin equipment and certificates, was $81
million USD and it is in the low range of the standard equipment for private
aircraft of this size, which oscillates between $75 and $125 million USD:
(v) The aircraft purchased is one of the best alternatives in terms of
efficiency in available costs on the market.
(Vi) Given the need to replace the current aircraft-which is 28 years
old-there are very few chances of finding an alternative aircraft with better
market conditions. The list price of an unequipped B787-8, one of the
smallest, most economical widebody aircraft on the market, is $218.4 million
USD, in other words, 90.6% higher than the original cost.
Due to the loss its sale would cause the public purse and the need to
replace the presidential plane at a much higher exchange rate, it was decided
to retain ownership of that aircraft.
SAFETY AND FUNCTIONALITY CONSIDERATIONS
Presidents require safe, reliable and efficient aircraft for the
performance of their functions, their teams and the media representatives
covering their activities. On average, 60% of the
passengers on each flight of the presidential plane are journalists.
Due to this national security consideration, the aircraft requirements
were determined by the Ministry of National Defense.
Although the “President Juárez” Boeing 757-225 operates with high safety
standards, it has flown for more than 28 years and shows inevitable signs of
aging and obsolescence. For example, it is
forbidden to land in various cities around the world because of the noise
pollution it emits, making it more difficult for the president to fulfill his
Between 1987 and 2015, 2,662 flights were made on 953 domestic and 323
international tours; together with 4,668 landings and 154 stops on
international tours. In 2015, it carried 5,151 passengers.
Due to the fact that the B757-225 model was discontinued in 2005, the
supply of parts and supplies is increasingly scarce, increasing their cost and
maintenance time. Precisely because there are no spare parts for the
fuel tanks with which it was originally configured, these had to be replaced by
others of a smaller capacity which reduces its flight range, requiring a
greater number of stopovers on transoceanic routes.
The Boeing 787-8 and 767-300 models were the two options for the new
aircraft for the presidential fleet, together with the Airbus A330-300.
The Department of Defense (SEDENA)
considered that the B787-8 offers better performance conditions,
including the following:
· Increased flight range, both in takeoffs from Mexico City and at sea
· It has a range of 13,900 kilometers, allowing it to fly nonstop to any
destination in the northwest of the American, European and African continents,
as well as certain destinations in the eastern and western part of Asia and the
east of Oceania;
· It consumes up to 20% less fuel than other aircraft in its class;
· It produces 60% less pollution than similar aircraft;
· It has navigation, approach and landing systems using land, satellite
and independent media, enabling routes to be followed more accurately and in
all weather conditions, thereby increasing safety and operational reliability;
· Its fuselage consists mainly of compound materials (carbon fiber),
offering lower weight and greater resistance to wear and corrosion;
· Its aerodynamic design reduces the effect of flight turbulence;
· It is equipped with latest generation General Electric engines
designed to fly 20.000 hours or 16 years before its first major revision;
· It can operate at 92% of the domestic airports where the “President
Juárez” has been used.
The “Jose Maria Morelos y Pavón”
aircraft can carry up to 80 passengers, 20 more than the capacity of the
"President Juárez" currently operating.
It has satellite telecommunication and Internet equipment, which will
allow the president to permanently receive and transmit information from anywhere
in the world, facilitating the completion of his working agenda even on
It has an estimated service life of 25 years, meaning that it will be in
service until 2040. In other words, it will be available to at least five
presidents of the country, their teams and the media assigned to covering the
FUTURE USE OF
the “President Juarez”
The “President Juárez” Boeing 757 will remain as part of the president’s
air fleet. It will serve as a backup aircraft when the “Jose Maria Morelos y
Pavon" aircraft is under maintenance.
Download the complete study on the aircraft here:
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