From the Taobao website: Three ex-Jade 747-400ERFs up for judicial auction.

UPDATE — 21 November 2017: Two of the three freighters were purchased by SF Express through the Taobao auction. Read the full update here.

You’ve clicked “Add to cart” for those new shoes, the milk powder, and a couple of bottles of shampoo. But before you hit “Buy,” is there anything else you need? Books? Music? Electronic gadgets?

No? Well, how about a 747-400ERF? Or, since they’re so cheap, how about three 747-400ERFs?

That’s right. Three 747-400ER freighters are currently being auctioned on Alibaba’s online shopping platform, Taobao. They are units 35169, 35173, and 35174, all formerly in the fleet of Shenzhen-based Jade Cargo International, and all in storage since Jade ceased operations in late 2011.

The aircraft are all available for just US$20 million each. Or at least, with starting bids of about $20 million each.

One owner. Low mileage. Great price. Sounds like a terrific bargain, right?

But before you rush to get your bid in by the 20 November deadline, you might want to think about the old saying, “if a deal seems too good to be true…”

Start with some history. Jade Cargo International was a joint venture of Shenzhen Airlines (51%), Lufthansa Cargo (25%), and KfW, a state-owned German bank  (24%).  It was the first of the big all-cargo joint ventures in China, and had the makings of a real success story – a way for non-Chinese carriers to get in on the rapidly growing Chinese cargo scene. By 2007, Jade had acquired six new 747-400ERFs, three on operating leases, three owned.

But things did not go smoothly. Jade ran into financial trouble and, eventually, ceased operations entirely in 2011.

When Jade declared bankruptcy, the three leased freighters were returned to the lessors, and were soon flying again (for AirBridgeCargo, CAL Cargo Air Lines, and Cargolux). But the three owned units were a problem, because, as Jade was running into trouble, the local bank that had financed the purchase of those freighters had increased its loan against them to keep Jade flying. By the time of the bankruptcy, the loans against each freighter had ballooned to a reported US$150 million, but, under Chinese law, the bank (which is state owned) was not allowed to take a loss against them.

With no one prepared to pay anywhere near the required price, the planes went into storage – one at Shanzhen Bao’an (SZX) and two at Shanghai Pudong (PVG) – where they have remained ever since.

There have been several unsuccessful attempts to organize a sale, and now, six years later, they have been put up for judicial auction.

So is $18.6 million to $20.5 million a good price for ten-year-old 747-400ERFs that were only flown for four years? It might be, if that were the total price. But Cargo Facts has been told that to put these freighters back into revenue service will cost a lot more than the $20 million auction price. They may have components (landing gear, particularly) that are run out on calendar, they are in need of D checks, the engines need overhauls, and, according to some reports, they have been less-than-optimally stored and may have corrosion problems.

Add all that up and the equation doesn’t balance out as the kind of bargain it first seemed.

All of which leads us back to a question we have been asking recently: If demand for general freight continues to grow, where do airlines go for the capacity needed to meet it?

There may still be some decent 747-400F/ERFs available on the used market, but not all that many – and they’re not getting any younger. So what is the alternative? 777F? 747-8F? One has no nose door, the other needs 140 tonnes to fill it, and both are hugely expensive. To say nothing of the fact that, unless Boeing gets more 747-8 orders fairly soon, the 777F will be the only choice.

Interesting times.