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Airbus List Prices Rise By Only 2 Percent

February 19, 2018

Discount Now Nudges 60 Percent

The rise in list prices continues even as new net pricing mostly stagnates as the product line continues to undergo its most significant transition in more than a generation.

The rise in Airbus list prices equates to two percent across all aircraft models, regardless of whether any have been sold in the last five years or whether they are the newest model with a backlog running into the thousands. The two percent rise compares with one percent in 2017 and one percent in 2016. The total rise between 2016 and 2018 is therefore just over four percent. In 2016 Boeing kept list prices flat but in 2017 increased the prices by 2.2 percent and by 4.1 percent in 2018 equating to a total 6.3 percent rise over the same three-year period amidst a strong dollar, low inflation and constrained labor costs. The indicated list prices reflect an average aircraft including both Buyer Furnished Equipment (BFE) and Specification Change Notices (SCNs). There will be a range of prices to compensate for differing specifications, weights, engine thrust etc.

Airbus is still quoting a list price for the A318, a type that has seen neither an order nor a delivery in many a year. The A380 is still managing to attract equilibrium between list price and value although the value of a new example has barely moved. There have been some sale and leaseback requests for proposals that equate to nearly $300 million. Such pricing has been mirrored by above market lease rentals and seemingly generous return condition compensation and reconfiguration. The values of the A350-900 have notably increased despite the entry into service issues while those of the A350-1000 have actually fallen as there continues to be concern over whether a stretch is needed and the lack of more recent orders.

While the rise in list prices is largely arithmetical, prices can simply change depending on whether the manufacturer deems other factors to be more important than labor, materials and power. Airbus has had to change list prices to account for exchange rate fluctuations and all manufacturers may increase prices if more equipment is fitted as standard or if there has been an improvement in specification. Despite significant advances in economies of scale for both Airbus and Boeing in terms of increasing the number of narrowbodies produced which effectively reduces the unit cost of production, neither has reduced list prices. Indeed, in terms of comparing the value of a new aircraft in 2018 against similar values in 2017, there has been little if any change with the A320ceo seeing a slight increase while the A330-200F has actually fallen by more than two percent. All values and prices indicated in the table reflect single units with the average discount now approximating 60 percent with the outgoing models inevitably seeing mostly higher levels of discounting. Large orders will attract considerable greater discounting.

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