NoUFO From Germany, joined Apr 2001, 7798 posts, RR: 13 Reply 1, posted (8 years 1 month 4 days 2 hours ago) and read 5089 times:
Ryanair sold some of the 737 ordered at prices lower than Boeing thus making an additional profit as aircraft seller. Some aircraft have been sold to (I think) ILFC and leased back. It's crazy.
And we can safely assume U2 got similar discounts when they bought their A319s, because they have copied Ryanair's strategy of selling new aircraft only to lease (some of) them back afterwards.
NoUFO From Germany, joined Apr 2001, 7798 posts, RR: 13 Reply 4, posted (8 years 1 month 3 days 19 hours ago) and read 4816 times:
Actually, they did. Not with 100, but when O'Leary ordered 737s the last time, analysts thought he had gone mad, because the number appereared to be way to high for an economically wise decision.
But an order this big helped Ryanair to buy new jets at a real bargain and to earn some additional money as a reseller. We can safely assume, Boeing was pi$$ed.
At the same time: What should Boeing do? Ryanair is Boeings biggest 737 customer only after WN.
DfwRevolution From , joined Dec 1969, posts, RR: Reply 5, posted (8 years 1 month 3 days 18 hours ago) and read 4797 times:
Quoting NoUFO (Reply 4): But an order this big helped Ryanair to buy new jets at a real bargain and to earn some additional money as a reseller. We can safely assume, Boeing was pi$$ed.
Boeing really can't complain... the mega-order for 737-800s came immediatly in the post-9/11 slump. Several 737 customers deferred their orders and FR was well aware that Boeing would much rather squeak out a narrow profit than cut-back production. In the end:
- Boeing was able to maintain production rates and still make money
- It's in Boeing's interest for a Boeing-loyal airline to grow rapidly and confidently
- It firmly cemented FR as a 737NG loyal airline (see below)
- FR now has favorable status with Boeing, which will give them a leg-up when it comes to defining the "737E"
Keesje From , joined Dec 1969, posts, RR: Reply 6, posted (8 years 1 month 3 days 18 hours ago) and read 4767 times:
So it´s official now: Boeing "sells" aircraft at half price.
No more nose in the sky "we don´t sell at a loss" talking anymore..
..or is it generating cashflow / filling production lines 2006-2008 now that other types (717, 747, 757, 767) fully/nearly stopped selling and 787 revenues still years away..
DfwRevolution From , joined Dec 1969, posts, RR: Reply 7, posted (8 years 1 month 3 days 18 hours ago) and read 4763 times:
Quoting Keesje (Reply 6): No more nose in the sky "we don´t sell at a loss" talking anymore..
Boeing stated that they refuse to sell airplanes below cost no more than a month ago.
Quoting Keesje (Reply 6): ..or is it generating cashflow / filling production lines
2006-2008 now that other types (717, 747, 757, 767) fully/nearly stopped selling and 787 revenues still years away..
Pal... you could say the exact same thing regarding the A380-800.
Also want to explain how selling airplanes for loss generates short term cash flow? I don't recall any 2-3 year old anything requiring huge amounts of support/spares from the respective OEM.
DfwRevolution From , joined Dec 1969, posts, RR: Reply 9, posted (8 years 1 month 3 days 18 hours ago) and read 4733 times:
Quoting RJ111 (Reply 8): Who knows what FR could pull in the future though.
The chance of an A320 in FR colors is below zero. With the add-on order this year, it's beyond certain that RyanAir will stick with the 737NG program until it is completed. Airbus only "in" would be in the next-gen narrowbody, and it isn't at all as if Boeing is unreceptive to requirements/request of WN and FR
N1120A From United States of America, joined Dec 2003, 25852 posts, RR: 79 Reply 12, posted (8 years 1 month 3 days 18 hours ago) and read 4715 times:
Quoting Keesje (Reply 6): So it´s official now: Boeing "sells" aircraft at half price.
No, this was less than a 20% discount
Quoting RJ111 (Reply 8): Who knows what FR could pull in the future though.
Safe to say anything they pull will not be the plug on their orders. It will likely be charging employees a surcharge for fuel consumed based on the weight they take on the aircraft.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
DfwRevolution From , joined Dec 1969, posts, RR: Reply 13, posted (8 years 1 month 3 days 18 hours ago) and read 4697 times:
Quoting Keesje (Reply 10): I think Airbus has a backlog of more then 1200 aircraft apart from A380´s and sold more then 100 aircraft apart from A380´s in Q1 2005.
That's confirming my point. 1,000 of those 1,200 aircraft in backlog are A320 series. Airbus has recently been hyper-aggressive (speculativly ramping up production in 2002/2003) with A320 sales, and it isn't unreasonable to assume this is to bridge the time until A388 revenue begins.
AirbusDriver From United States of America, joined Feb 2001, 255 posts, RR: 1 Reply 14, posted (8 years 1 month 3 days 16 hours ago) and read 4625 times:
Quoting N1120A (Reply 12):
No, this was less than a 20% discount
From 61 Millions To 29 Millions is 20% ??? You need to go back to school.
61 to 68= List Price.
51= Start price for FR.
29 = what they paid.
As usual you are talking out of your ass...Go back flying your C172...
N1120A From United States of America, joined Dec 2003, 25852 posts, RR: 79 Reply 15, posted (8 years 1 month 3 days 15 hours ago) and read 4574 times:
Quoting AirbusDriver (Reply 14): From 61 Millions To 29 Millions is 20% ??? You need to go back to school.
61 to 68= List Price.
51= Start price for FR.
29 = what they paid.
What the hell are you talking about? According to the news reports, FR's price for the 738s in their recent major order is $51.5 million dollars plus $900,000 to APB for winglets.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
LN-MOW From United States of America, joined Jan 2000, 1896 posts, RR: 15 Reply 16, posted (8 years 1 month 3 days 15 hours ago) and read 4559 times:
N1120A - read again:
Quote: However, the filing adds that Boeing granted Ryanair "certain price concessions" in the form of credit and allowances that "will reduce the effective price of each aircraft to Ryanair significantly below the basic price."
Boeing will also provide a range of support services, and will install fuel-conserving winglets at no extra cost.
The document gives one further clue to Ryanair's price tag: It states that 454 million euros (or $593 million) will be required to fund the 29 jets to be delivered between now and March 2006, or about $20 million per aircraft.
And elsewhere it says 30 percent of the price is required in advance of delivery, suggesting the $593 million will pay the remaining 70 percent.
That works out to a bargain price tag on Ryanair's jets of about $29 million.
N1120A From United States of America, joined Dec 2003, 25852 posts, RR: 79 Reply 17, posted (8 years 1 month 3 days 15 hours ago) and read 4535 times:
Quoting LN-MOW (Reply 16): However, the filing adds that Boeing granted Ryanair "certain price concessions" in the form of credit and allowances that "will reduce the effective price of each aircraft to Ryanair significantly below the basic price."
Wait, so Boeing extending credit is seen as a price reduction? It just means FR will have more time to pay.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
LN-MOW From United States of America, joined Jan 2000, 1896 posts, RR: 15 Reply 18, posted (8 years 1 month 3 days 14 hours ago) and read 4496 times:
Read again. How much more specific can it get?
Quote: The document gives one further clue to Ryanair's price tag: It states that 454 million euros (or $593 million) will be required to fund the 29 jets to be delivered between now and March 2006, or about $20 million per aircraft.
And elsewhere it says 30 percent of the price is required in advance of delivery, suggesting the $593 million will pay the remaining 70 percent.
And ........
Quoting N1120A (Reply 15): plus $900,000 to APB for winglets.
Quote: Boeing will also provide a range of support services, and will install fuel-conserving winglets at no extra cost.
.. which should indicate that Boeing will pay APB these 900.000 .....
LHSTR From Germany, joined Mar 2001, 226 posts, RR: 1 Reply 20, posted (8 years 1 month 3 days 6 hours ago) and read 4331 times:
The whole problem is what Boeing is considering "the cost" of a B737.
Specially in difficult times, e.g. after 9/11) Boeing has an interest of staying in business. For new orders it needs to assure that all variable cost is covered by the customer, but every penny that is above the variable cost helps Boeing to pay for its fix cost. Therefore you accept "loss making" orders as long as you are at least parially able to pay for the fix cost.
This is only one aspect. The next aspect is how the cost is diveded between all of Boeings products. Most materials and production hours can be easily connected to one product. But all the other cost, e.g. overhead, needs to be split according to some factors. These factors are defined by Boeing. Therefore the final cost of a product is totally according to Boeing's own definition.
Therefore, the production cost of a B737 does not exist. This whole argument is also true for Airbus and the A320. All these discussions about Airbus or Boeing discounting their airplanes and selling them below cost is absolute nonsense. At least for us who dont have access to detailed data about the production cost.
Navion From United States of America, joined May 1999, 981 posts, RR: 1 Reply 23, posted (8 years 1 month 3 days 3 hours ago) and read 3902 times:
I did get one quick glimmer of how deeply Airbus is discounting A320's when a J.P. Morgan analyst recently stated U2 paid $24 Million a copy for their A319's. Anyone else read this article about 2 months ago? It was part of an article in a financial periodical but I don't recall if it was the Wall Street Journal, Barrons, or some other source. The analyst gave some great insight into the Easyjet deal and it was unbelievable, especially in light of the training and other incentives thrown in. Airbus would have to do some incredibly creative accounting to claim profit on the U2 deal. I know of Falcon 2000's and Challenger 604's that cost a few million more than U2's A319's.
Trex8 From United States of America, joined Nov 2002, 3970 posts, RR: 14 Reply 24, posted (8 years 1 month 3 days 1 hour ago) and read 3657 times:
Quoting Navion (Reply 23): Airbus would have to do some incredibly creative accounting to claim profit on the U2 deal.
they don't have to make a profit, the A320 line has paid for itself and those Euro govts who financed the project 2 decades ago have been getting royalties (above their loans + interest payments) since the late 90s. they could take a loss, or barely break even on their narrowbodies, simply to keep market share or keep potential widebody customers in their camp by "giving away" narrowbodies. its the same thing car manufacturers do all the time.
given an A330 "list price" is supposed to be almost close to mid one hundreds million$, the fact that NW reportedly got some for something like in the 60s and CI financed their first 3 for only 70 shows "half price" discounts are getting to be the norm!
25 Aviationfreak: Well, considering the fact their personnel have to pay for the uniforms they are wearing maybe the pilots have to pay for the a/c they are flying.
26 NoUFO: That's correct, but Boeing would have been better off with more carriers placing their orders in Seattle than in Dublin and a somewhat smaller FR ord
27 MidnightMike: Nope, your math is off, just a bit: The price for each 737-800 airplane will be about $51 million, including the engines and some optional features,
28 N1120A: He did, hence he saud 1,000 of the 1,200 were A32S
30 N1120A: Well, make that 1064 out of 1531 as of the end of March
31 Lrgt: U2 did INDEED...according to the Wall Street Journal from February, they paid $22M for their A319's. This is about the same level of discount FR rece
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