Jan. 17, 2018, © Leeham Co.: Airbus announced a list price hike Monday of just under 2%.
Such price hikes are common. Boeing hasn’t announced whether it will raise the list prices this year, but in the past, it’s typically done so.
Airbus continues to list the A318 and A350-800 in its price list. There hasn’t been a commercial sale of the A318 in years and Airbus skipped creating a neo version of this double-shrink airplane.
Ostensibly, Airbus continues to offer the aircraft as an Airbus Corporate Jet (ACJ), but sales of this are few and far between.
Airbus also continues to list the A330-800 despite having only one customer with a small order for the airplane.
Hawaiian Airlines is the only customer for the A330-800. The first A330-800 test plane is now in production.
Airbus vacillated whether to even proceed with the model. At one point, the market was under the impression Airbus would abandon the sub-type. Later, Airbus officials publicly endorsed the airplane, but no additional sales have been forthcoming.
In a Dec. 6 post, LNC reported officials believe the market will emerge for the -800 beginning in 2020, as A330-200s begin hitting the end of initial lease terms and as the long-haul, low-cost carriers proliferate.
Officials also claim the A330-800 represents Airbus’ entry into the upper end of the Middle of the Market sector (the lower end is covered by the A321neo, they say). With Boeing nearing a decision whether to launch the New Midmarket Aircraft (NMA) this year or early next year, Airbus is pitching the A330-800 to remaining Boeing 767 operators as the replacement solution that’s available now, rather than in five or more years.
The A350-800 remains on Airbus’ price list despite having abandoned this airplane several years ago.
At one point, there were nearly 200 orders for the model. But as the A350 program ran over budget and encountered delays, along with other costly developments (like the A400M) that ate into cash flow, Airbus encouraged airlines to upgauge to the A350-900.
This helped “de-risk” the production, cutting back to two models (the -900 and -1000) vs having three, it was said.
The larger -900 was more profitable for Airbus, officials said. The -900 has a list price that is $30.2m more.
The larger issue, however, appeared to be the realization by airlines that the operating costs for the -800 were about the same as the -900, but with fewer seats—an endemic problem with a “shrink” airplane, as the -800 was.
Which brings us to the A318.
The A320 is the baseline of the family. The A319 is a shrink of the A320 and the A318 is a shrink of the A319.
The A318 was Airbus’ response to the McDonnell Douglas MD-95. The 737-600 was Boeing’s response. Squeezed between the two airplanes, and hobbled by its own strategy and management, MDC gave up and merged into Boeing. Boeing killed the MD-95, renamed the 717, after a production run of 156 aircraft.
Few A318s were sold to airlines and they were quick to find their way to scrapping as economics—already marginal—went upside down with rising fuel prices.
Yet Airbus hasn’t officially killed the airplane in its price list.
This isn’t unusual, either, with Boeing. The 737-600 similarly sold poorly, but it was years after the last sale before Boeing dropped it from the price list.
The 767-200ER hadn’t seen a sale for years. Like the 737-600, it was long after the last sale before this disappeared from the price list.
There have been no sales of the Boeing 777-200ER for years, but there it was, on the Boeing price list last year.
The list price is meaningless when it comes to actual sales prices or aircraft valuations.
Airbus and Boeing—and their smaller counterparts, Bombardier and Embraer—heavily discount the list prices when it comes to orders.
Discounts of 50%, regardless of the model, is not at all uncommon, up from 40%-45% in years prior. On occasion, discounts of 60% or more have been seen in the market—and it’s not all that rare.
The discounts off a higher list price theoretically mean a better sales price—but it also could mean a larger discount to get to the final sales price.