Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Easyjet A319 50% Price Discounts  
User currently offlineLightsaber From United States of America, joined Jan 2005, 13003 posts, RR: 100
Posted (9 years 6 months 3 weeks 4 days 4 hours ago) and read 8613 times:
Support Airliners.net - become a First Class Member!

I was just reading my online Wall Street Journal and was surprised there wasn't a thread on the discounts easyjet received for their Airbus order.

http://online.wsj.com/article/0,,SB110746205226745296,00.html?mod=todays_us_money_and_investing

Analysts figure easyJet received a 50% discount on the $44 million list price of an A319. EasyJet itself told shareholders at the time of the purchase that it was 33% less costly than the Boeing 737 aircraft that formed its initial fleet.  Wow!

Mr. Avery figures easyJet buys the planes at around $22 million each, assuming a 50% discount. It quickly sells the bulk of them to different aircraft-leasing companies for about $28 million each, published figures reveal.

 Wow! A quick instant profit off cheap jets!  Wow!

If there is already a thread... mea culpa, I didn't find it.
I'm just wondering if B6 received discounts like this. If the leasors are willing to buy aircraft to lease back for more than the airline paid... This gives quite a leg up to the airline that received the discount.

Note: this isn't a "B6 didn't pay for their jets" thread. I've argued before that they received great pricing on the A320's (and E190's). This is the first reputable article I've seen that quantified the discounts airbus gave in the time frame of interest.  Smile

Lightsaber


Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
50 replies: All unread, showing first 25:
 
User currently offlineNWDC10 From , joined Dec 1969, posts, RR:
Reply 1, posted (9 years 6 months 3 weeks 4 days 4 hours ago) and read 8572 times:

I don't buy jets but i do shop for bargains/sales to streatch my dollar. If i were in the airline industry, i'd do the same for a/c. Robert NWDC10

User currently offlineA340600 From United Kingdom, joined Aug 2003, 4105 posts, RR: 51
Reply 2, posted (9 years 6 months 3 weeks 4 days 4 hours ago) and read 8544 times:

Though generally more popular with EZY crews and passengers, the A319 is proving a bit of a trouble for EZY. They've always got an old 733 in bacuase one isn't working,

Sam



Despite the name I am a Boeing man through and through!
User currently offlineLightsaber From United States of America, joined Jan 2005, 13003 posts, RR: 100
Reply 3, posted (9 years 6 months 3 weeks 4 days 4 hours ago) and read 8530 times:
Support Airliners.net - become a First Class Member!

A340600

Can you be specific on the A319 trouble for EZY? (Link?)

I'm trying to keep this from going A vs. B and instead keep a discussion on the aircraft discounting that was/is going on. I'm fascinated that analysts believe such discounts occurred. (They tend to be good at following the money...)

But... Obviously I've left the door open for EZY A319 discussions too! I just don't want my 2nd thread started to go A vs. B.

Lightsaber.



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineA340600 From United Kingdom, joined Aug 2003, 4105 posts, RR: 51
Reply 4, posted (9 years 6 months 3 weeks 4 days 4 hours ago) and read 8513 times:

I am not turning this into an AvB thread. As many know, i easily prefer the A319, but EZY has had many many troubles with their batch. My father works at LGW on pier 1 with them and he says that on average 2 of them break down a week. Sometimes, you go to LGW and there will be 3 733s, all standing in for broken 319s!

Something else interesting, EZY are looking at BA for maintenence at LGW, one of the BA employees told me. The thought Laugh out loud!

Sam Smile

[Edited 2005-02-05 03:34:57]


Despite the name I am a Boeing man through and through!
User currently offlineLightsaber From United States of America, joined Jan 2005, 13003 posts, RR: 100
Reply 5, posted (9 years 6 months 3 weeks 4 days 4 hours ago) and read 8498 times:
Support Airliners.net - become a First Class Member!

Sam/A340600
Thanks!  Smile The facts from your dad were exactly what I was wondering.

Neil/Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineA340600 From United Kingdom, joined Aug 2003, 4105 posts, RR: 51
Reply 6, posted (9 years 6 months 3 weeks 4 days 4 hours ago) and read 8494 times:

Pleasure to be of help,

Sam Smile



Despite the name I am a Boeing man through and through!
User currently offlineLrgt From United States of America, joined Jul 2004, 710 posts, RR: 0
Reply 7, posted (9 years 6 months 3 weeks 4 days 1 hour ago) and read 8361 times:

I was wondering the same thing myself...YOU BEAT ME TO THE THREAD Lightsaber!

Who is the leasing company that paid $28M each? I think they got quite the bargain too!!!

I find it difficult to beleive the A319's are so unreliable.



Don't bring up the NW DC9's unless you have to!
User currently offlineN867BX From United States of America, joined Nov 2004, 339 posts, RR: 0
Reply 8, posted (9 years 6 months 3 weeks 4 days 1 hour ago) and read 8328 times:

Hmm...

I think I will order up one 319 and then sell it to a leasing company. I could live well on $6,000,000. Do you think Airbus will take a personal check and not cash it till I resell the plane?


User currently offlineLrgt From United States of America, joined Jul 2004, 710 posts, RR: 0
Reply 9, posted (9 years 6 months 3 weeks 4 days 1 hour ago) and read 8315 times:

N867BX...Do you have an famous airline with an all-Boeing fleet???


Don't bring up the NW DC9's unless you have to!
User currently offlinePlaneSmart From New Zealand, joined Dec 2004, 905 posts, RR: 0
Reply 10, posted (9 years 6 months 3 weeks 4 days ago) and read 8300 times:

Analyst/s are better informed than leasing companies that actually deal with A & B? I don't think so. Leasing companies are so badly informed that they wouldn't order A319's for the same $'s as EZY?

The analyst should look a bit more carefully at the order / current ownership / common shareholders, and they might think up another explanation.


User currently offlinePe@rson From United Kingdom, joined Jan 2001, 19205 posts, RR: 52
Reply 11, posted (9 years 6 months 3 weeks 3 days 19 hours ago) and read 8105 times:

U2, like all businesses, exist to make a profit (accept those that don't make a profit, like charities). Accordingly, it is essential to be as efficient as possible to help in the achievement of this. This explains why they rightly negociated very keenly and got such an excellent deal. From the sound of it, numerous people on this website would accept the listed price and pay that.


"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
User currently offlineEZYAirbus From United Kingdom, joined Sep 2003, 2460 posts, RR: 52
Reply 12, posted (9 years 6 months 3 weeks 3 days 19 hours ago) and read 8086 times:

we do have some problems with our A319s most probably teething problems, on occasions we have had to replace the daily A319 service to Dortmund with a 737 on occasions, the A319 landed at LTN and been stuck here once, nothing serious though has gone wrong yet!

Glenn



http://www.glenneldridgeaviation.com
User currently offlineBALandorLivery From UK - England, joined Jan 2005, 360 posts, RR: 1
Reply 13, posted (9 years 6 months 3 weeks 3 days 19 hours ago) and read 8000 times:

Looks like airbus will do anything to sell its aircraft these days.

Thats a big discount!! How much profit can they make from those prices?
Are they doing this just to undercut Boeing and to try 2 get more of a cut in the low cost market?

Also which other airlines have had discounts in order to get airbus orders rather than Boeing orders?

no A v B war comments though pls
Regds


User currently offlineLeskova From Germany, joined Oct 2003, 6075 posts, RR: 70
Reply 14, posted (9 years 6 months 3 weeks 3 days 18 hours ago) and read 7986 times:

Looks like airbus will do anything to sell its aircraft these days

These days? This order isn't exactly a recent one... they received their first planes in 2003...

In any case, yes, Airbus does discount the planes - so, by the way, does Boeing, even if not as far as Airbus. Then again, who really knows...

As for the constant and recurring claims that Airbus sells its planes below cost... no-one has ever been able to bring up real proof of that, and as long as Airbus continues to produce healthy profits, I guess they really won't change anything in the way they do business - after all: why should they?

Regards,
Frank



Smile - it confuses people!
User currently offlineBALandorLivery From UK - England, joined Jan 2005, 360 posts, RR: 1
Reply 15, posted (9 years 6 months 3 weeks 3 days 18 hours ago) and read 7957 times:

Leskova :

Thats a very good and valid point.

I am not suggesting that Boeing don't discount, of course they will offer deals.
And yes airbus do continue to post profits.

But 33%-50% off list price, if those figures are true, is a huge reduction in price.

It would be interesting to find out how much money they make of those orders and how much money they make off a normal list price A319 sale.

Regds.


User currently offlineA340600 From United Kingdom, joined Aug 2003, 4105 posts, RR: 51
Reply 16, posted (9 years 6 months 3 weeks 3 days 17 hours ago) and read 7853 times:

the A319 landed at LTN and been stuck here once, nothing serious though has gone wrong yet!

Wait till you have hundreds of Bus flights a day, then they'll start! They are having major teething problems, but let's hope everything is ok soon!

Sam



Despite the name I am a Boeing man through and through!
User currently offlineGlideslope From United States of America, joined May 2004, 1612 posts, RR: 0
Reply 17, posted (9 years 6 months 3 weeks 3 days 8 hours ago) and read 6549 times:


OMG!!! Talk about subsidies!!!  Nuts

The truth is starting to come out. Keep the WTO pressure on!!!



To know your Enemy, you must become your Enemy.” Sun Tzu
User currently offlineRamerinianAir From United States of America, joined Nov 2003, 1486 posts, RR: 0
Reply 18, posted (9 years 6 months 3 weeks 3 days 8 hours ago) and read 6401 times:

So what is Airbus' goal in the industry? Do they really NEED all that money from Germany and France amoung others????? Is a 50% discount really warranted to compete???
From what it sounds like, even steep discounts cannot fix bad dispatch rates!
SR



W N = my Worst Nightmare!!!!!
User currently offlinePelican From Germany, joined Apr 2004, 2531 posts, RR: 8
Reply 19, posted (9 years 6 months 3 weeks 3 days 7 hours ago) and read 6355 times:

@RamerinianAir
You should know the reasons for their bad dispatch reliabilty before making any comments...

pelican


User currently offlineAither From South Korea, joined Oct 2004, 858 posts, RR: 0
Reply 20, posted (9 years 6 months 3 weeks 3 days 7 hours ago) and read 6349 times:

A lot of BS in this thread.

Just wondering why Boeing did not go straight to the WTO years ago...

The A319 is an excellent aircraft. Purchasing price is important for the LCCs but quite less important that pure operational economics (otherwise they would just operate second hand aircraft). Indeed, LCCs operate their fleet with a high utilisation so they are "the most" operational costs sensitives.

Now about the 50% discount - we don't no for sure - think about economics related to volumes.



Never trust the obvious
User currently offlineAirbusDriver From United States of America, joined Feb 2001, 255 posts, RR: 1
Reply 21, posted (9 years 6 months 3 weeks 3 days 2 hours ago) and read 5984 times:

50% OFF I don't think so!!! They got the order because it's a better plane, I know I've got thousands of hours on both...Day and night...

User currently offlineGkirk From UK - Scotland, joined Jun 2000, 24926 posts, RR: 56
Reply 22, posted (9 years 6 months 3 weeks 2 days 20 hours ago) and read 5911 times:

They got the huge discount, and Airbus offered to train their pilots for free on the A319.
Just like when Ryanair ""raped" Boeing for their 738s



When you hear the noise of the Tartan Army Boys, we'll be coming down the road!
User currently offlinePe@rson From United Kingdom, joined Jan 2001, 19205 posts, RR: 52
Reply 23, posted (9 years 6 months 3 weeks 2 days 20 hours ago) and read 5903 times:

It's business. Negociation is fundamental until one side can sell at a price they're willing to and the other can get a very decent - and discounted - price for bulk-buying. If, say, you wanted 1 million cars you would, if you were sane, negociate until you reached a decent discounted price - somewhere, perhaps, between half and the three-quarter price for one car. Yes, the dealer would be getting less for each car, but overall would be earning a considerable sum. If a sufficently discounted price was not reached, then it might be possible for the potential buyer to go elsewhere.


"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 24, posted (9 years 6 months 3 weeks 2 days 19 hours ago) and read 5837 times:

I think the bulk discount notion is very obvious. It is a well-known and routine business practice from retail sales to aircraft sales. I doubt the Wall Street Journal needs to educate readers about this concept and devote an article to it. I think the issue is how narrow of a profit or how big of a loss Airbus absorbed to get a foothold into a market it deigned "strategic."

It is doubtful that was the only sale in which Airbus aimed for market share over profit. Although I have not read Milton's book, Airbus supposedly sold A340-500 to Air Canada at $80 million each. (I believe that is the source) While I have not purchased an airplane, I know enough to know that is a hugely discounted price.

EU competition doctrine aims to ensure competition by essentially protecting competitors. But I would bet money that the responsible DG in Brussels would never be allowed to even begin an anti-dumping inquiry against Airbus not even for a sale in Europe.

[Edited 2005-02-06 12:44:46]

25 A340600 : Exactly, for all those complaining that Airbus are offereing EZY such good prices, wonder how FR got all those 738's! Sam
26 Post contains images Leskova : N79969, seeing that not even the US authorities have, to my knowledge, opened up an anti-dumping inquiry about Airbus, I doubt that the European side
27 Ruscoe : LCC don't buy 2nd hand planes because Airbus have forced the price down that much, that it is cheaper, to buy new ones, once maintenance etc of 2nd ha
28 Rightwayup : A340600, Your info is incorrect and sensationalist. I have flown over 300 hours in the last 6 months and not had one AOG. The 3 -300s you talk about w
29 Post contains images A340600 : Calm it Actually the A319's have had a lot of teething problems themselves, ask a lot of EZY staff. Oh and also, I never said LGW had all the A319's.
30 Planesarecool : Actually sam, for the first few months of 2005 they are/have been coming every 8 days, which is nearer to a week (7 days) than half a month (15 days).
31 RightWayUp : A340-600 You are reporting 2nd hand info and obviously do not have a tab on what is going on at LGW. You say "ask Easyjet staff". Everyday I sign the
32 N79969 : Frank, The US anti-dumping laws apply in cases involving imports to the United States. They could be invoked in neither the Easyjet deal nor the Air C
33 Post contains images A340600 : Oh for god's sake just calm down. There were a lot of EZY 319s breaking down, and yes, it appears that the teething problems are pretty much sorted Ap
34 Leskova : N79969, I'm well aware that the US laws are not applicable in the cases of U2 and AC, but what about the jetBlue deal - one where some have gone as fa
35 Post contains images Pe@rson : It is still humous that a mere fan is arguing against a pilot with the concerned airline on a topic on which one party will have considerably greater
36 RightWayUp : Sam, I am very calm. I just don't appreciate loose statements from which the travelling public will infer that Easyjet at LGW are unreliable, when the
37 N79969 : Frank, I should prefaced with an "as you know" in the last post. I have heard of Airbus being aggressive in the U.S. but not predatory. I think Airbus
38 Icebird757 : No we do not recieve any major discounts. We(jetBlue) pay around $54 million a piece for our planes.[Edited 2005-02-06 18:10:28]
39 PlaneSmart : Even though A & B contracts follow a fairly consistent format, it can be difficult, if not impossible to at a glance work out the purchase price. And
40 Lightsaber : Planesmart: I agree, purchase price can be a slippery slope, but if analysts, who ONLY care about the money, say EZY is making a profit reselling to l
41 N1120A : >I'm just wondering if B6 received discounts like this. If the leasors are willing to buy aircraft to lease back for more than the airline paid... Thi
42 Trevd : Icebird757 - $54M is the list price and that's the only pricing info that is ever released to the public. There's no question JetBlue got a great deal
43 PVG : Planesmart: "EasyJet spokesman Toby Nichol said the company doesn't dispute Mr. Avery's general conclusions, although it can't disclose the price it p
44 Post contains images Lightsaber : PVG Airbus will rue the day they started discounting because they have forced their competitor to become so lean and mean that they can match their de
45 PlaneSmart : Steady as she goes PVG. In the mid-70's i tried to buy a new Porsche in the UK, and was turned down because i didn't meet Porsche ownership requiremen
46 PVG : Got it planesmart. I feel better now that I've got everything done before Chinese New Year. I see your point. I think that B's concept was not to fuel
47 Col : What advantage does Airbus have by offering two engine manufacturers against Boeings single. Surely, it is better for the airline to get a better deal
48 Lightsaber : Col: Bingo! On average an A320 engine sells for $900k less (each) than the 737 engines. Ok, at least in 2001. (I don't have current numbers.) Planesma
49 Col : Lightsaber, That is some saving on motors. Has RR pushed for an engine on the 350 yet?
50 Lightsaber : Col, The scuttlebut I've heard is that airbus isn't ready to downselect engines on the A350 yet and has not "turned on" the engine vendors. I doubt RR
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
EasyJet A319, Why 4 Overwing Exits? posted Fri May 26 2006 02:10:46 by Svenskpilot
Easyjet Slowly Increased Price While Booking! posted Thu Jan 26 2006 20:48:39 by Birdwatching
GLA & EDI To Become EasyJet A319 Bases posted Fri Dec 23 2005 13:54:01 by Rick767
EasyJet A319 posted Fri Dec 23 2005 01:37:54 by ACdreamliner
EasyJet A319 Options posted Tue Dec 13 2005 10:03:18 by Overcast
Easyjet A319-111's Wing Exits posted Tue Sep 6 2005 03:32:40 by AIRCANL1011
EasyJet A319 G-HMCC posted Thu Jul 28 2005 17:18:38 by Jetset7E7
Easyjet A319's (again) - Question? posted Thu Jul 7 2005 08:45:46 by Cxsjr
EasyJet A319 - G-HMCC posted Mon Mar 14 2005 11:29:13 by Atco2b
New Easyjet A319 posted Thu Dec 9 2004 13:40:09 by Virginlover1