Regional Aircraft List Prices Fail to Rise

June 10, 2019

Level of Discounting Still Less than Larger Aircraft

While the list prices published by the manufacturers of larger commercial jets continue to present a substantive disconnect with the values of new aircraft, the list prices of regional jet makers have better, if still divergent, correlation.

The difference between list prices and values on the larger commercial jets has continued to widen such that the average discount is now approximately 60 percent based on even single unit purchases. Both. For the regional jet manufacturers, the differential between list and the value of a new aircraft has been more limited.


The list prices of the ATR aircraft remain reasonably low when compared to current values, the ATR72-600 particularly. The net price being paid by customers of the ATR72-600, particularly with respect to quantities involving more than five aircraft, may have attracted considerable discounts. A few lessors have entered this market and their purchasing power may eventually distort the market when such aircraft sold on the used market. The ATR72-600 in particular had seen low rentals although the last year has seen an improvement. The pricing of the A220 had been the subject of recent trade disputes. The Delta order for the A220 reportedly involved a purchase price of approximately $20 million versus the single unit value of $32 million and the list price of nearly $80 million. All manufacturers have participated in strategic pricing with some customers although at $20 million or less, this was exceptionally low if correct. To ensure that the A220 aircraft is sold then pricing will continue to play a part but Airbus is working to reduce the production cost. The problems of Bombardier has inevitably had an impact on the smaller aircraft with the CRJ900 being offered at low prices which in turn has affected current market values. There are few if any orders for the CRJ700 as Bombardier pushes the CRJ900 which has a higher gross margin assuming it can be sold at above cost pricing. Bombardier is seeking to dispose of the CRJ while the Dash8 program has already passed to Longview who have re-adopted the name de Havilland.

The net discount of Embraer aircraft amounts to some 40 percent although with the existing product line in the process of being replaced with the E2 the value of new aircraft is actually falling compared to previous years thereby increasing the net discount. The E175 Enhanced still has a considerable backlog largely due to scope clauses which means that the new E175E2 is too heavy for the existing restrictions. The concentration of the E175 within the U.S. is reminiscent of the ERJ145 issue, the values of which are still being affected. The MRJ product is in the midst of flight development and service entry is still time away and as such placing a value on the aircraft requires careful consideration.

The value of a new aircraft is not the net price paid by the customer but is instead the value of the aircraft if it were to have been delivered from the manufacturer to its customer and then immediately sold to a third party. There can be a considerable difference between the net price paid and the value of a new aircraft particularly for example if the aircraft is one of the last to be built for which the specification has not changed for many years.


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