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Disclosed Airbus Selling Price  
User currently offlineAirlineEcon From United States of America, joined Feb 2007, 129 posts, RR: 0
Posted (7 years 2 months 3 weeks 1 day 5 hours ago) and read 7838 times:

This morning I was reading a rather matter of fact Reuters news article about Flyington's A330F deal and something struck me as odd. Quoting the article:

Flyington Freighters will pay $175 million for each Airbus plane, said Kiran Rao, executive vice-president for marketing and contracts, customer affairs at Airbus.

To me this sounds like Airbus is disclosing some of the financial details. Normally an article would say something like "Airbus would not comment on the terms of the deal. The list price for the aircraft is $XXX, but carriers usually negotiate discounts".

This might be much ado about nothing, but to us A.netters its a big deal to actually hear the deal value from the horses mouth. I have read a lot of these press releases and never learned anything about prices.

I trust Reuters news agency and am hesitant to think the reporter made a mistake. In fact if you look at the heading on the press release it is an update to an old story, that explicitly says the purpose of the update is to add the deal value.

There is another thread about the flyington deal that I don't care about per se. I'm just wondering what you think about the deal disclosure.

http://yahoo.reuters.com/news/articl...06_BOM272359&type=comktNews&rpc=44

[Edited 2007-05-09 23:27:06]

17 replies: All unread, jump to last
 
User currently offlineWestWing From United States of America, joined Feb 2005, 2134 posts, RR: 7
Reply 1, posted (7 years 2 months 3 weeks 1 day 5 hours ago) and read 7778 times:

Quoting AirlineEcon (Thread starter):
Flyington Freighters will pay $175 million for each Airbus plane, said Kiran Rao, executive vice-president for marketing and contracts, customer affairs at Airbus.

Think about it for a minute.

Is it more likely that a VP of marketing for Airbus would reveal the actual price paid by the customer, or is it more likely that a reporter wrote down what he thought he heard instead of what was actually said?



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User currently offlineXT6Wagon From United States of America, joined Feb 2007, 3392 posts, RR: 4
Reply 2, posted (7 years 2 months 3 weeks 1 day 5 hours ago) and read 7694 times:

175million sounds like a list price, not a discounted price

User currently offlineScbriml From United Kingdom, joined Jul 2003, 12393 posts, RR: 46
Reply 3, posted (7 years 2 months 3 weeks 1 day 4 hours ago) and read 7600 times:
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Quoting AirlineEcon (Thread starter):
Normally an article would say something like

Normally an article would say something like ".. the deal is worth $n at list prices."



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User currently offlineAminobwana From , joined Dec 1969, posts, RR:
Reply 4, posted (7 years 2 months 3 weeks 1 day 4 hours ago) and read 7548 times:

Quoting AirlineEcon (Thread starter):
This morning I was reading a rather matter of fact Reuters news article about Flyington's A330F deal and something struck me as odd. Quoting the article:

Flyington Freighters will pay $175 million for each Airbus plane, said Kiran Rao, executive vice-president for marketing and contracts, customer affairs at Airbus.

This is the same as stated by AIR PORTUGAL and is a List Price. The A330-200 list price is about $ 140 M
and the cargo version as usual is more expensive

aminobwana


User currently offlineManni From South Korea, joined Nov 2001, 4221 posts, RR: 23
Reply 5, posted (7 years 2 months 3 weeks 1 day 2 hours ago) and read 7263 times:

Quoting Aminobwana (Reply 4):
The A330-200 list price is about $ 140 M
and the cargo version as usual is more expensive

No it's not. The A330-200 is listed for about US$165 million. Freighters are indeed usually more expensive.

Quoting XT6Wagon (Reply 2):
175million sounds like a list price, not a discounted price

Not unlikely that they payed close to list price. The A332 is the only aircraft in it's class. If that's what they're after, there might be little room for negotiation.



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User currently offlineXT6Wagon From United States of America, joined Feb 2007, 3392 posts, RR: 4
Reply 6, posted (7 years 2 months 3 weeks 1 day 1 hour ago) and read 7210 times:

Quoting Manni (Reply 5):
Not unlikely that they payed close to list price. The A332 is the only aircraft in it's class. If that's what they're after, there might be little room for negotiation.

I'm not claiming what they paid, though I bet its far below $175million since 6 frames at X $$$ needs to be equal or less than the price of 4 777F frames. I don't think that 777F are being sold for as much as $175m a frame... so I'm guessing the A330F is a good bit below $175.

Thats ALL i am going to say since thats the "easy" math.


User currently offlineManni From South Korea, joined Nov 2001, 4221 posts, RR: 23
Reply 7, posted (7 years 2 months 3 weeks 1 day 1 hour ago) and read 7197 times:

Quoting XT6Wagon (Reply 6):
I bet its far below $175million since 6 frames at X $$$ needs to be equal or less than the price of 4 777F frames.

Why do 6 A330F's need to be equal priced or cheaper then 4 777F's?



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User currently offlineTPAnx From United States of America, joined Aug 2005, 1021 posts, RR: 0
Reply 8, posted (7 years 2 months 3 weeks 1 day 1 hour ago) and read 7078 times:

Quick question...why does a freighter cost more than the pax model of the same plane? I'd think the opposite would be true...
TPAnx



I read the news today..oh boy
User currently offlineXT6Wagon From United States of America, joined Feb 2007, 3392 posts, RR: 4
Reply 9, posted (7 years 2 months 3 weeks 1 day 1 hour ago) and read 7020 times:

Since frieghers usualy price out closer to the total tons payload of the total order than one would think.

So the $$ per ton of payload is strangely more of a constant than you would assume given how far apart the freighters might be in frame size/payload.

So for an equal cost, many would rather go with the smaller aircraft in larger numbers for enhanced flexibility, but I don't know that any freight company would put any meaningful premium on it. Now the case you might see this broken is for a small order from a small operator who CAN'T cross shop larger planes. So if an operator can ONLY fly 767's out of his airport, and goes shopping for new frames, its going to get ugly. If he can move up to cross shop A330F then it can go back down some. If he can shop the whole range from 767 to A380F, then well he is going to get a fairly fixed "price per ton payload".

I think you are being oversensitive since 30% discount is below market normal discount and still brings the A330F to a nice price when compared to the 777F which is what? 225M list price?

More over while I have been and will be critical of some of the apparent prices Airbus has been selling A330 for, I have NO reason to believe that this was in any way a bad sale. I have no idea the discount rate that Airbus gave only that something "reasonable" had to have been given to beat the 777F *If* my assumption that they were given a normal 777F discount. In other words I think that Airbus had to give a minimum of 30% discount, which is a far LOWER discount than average.


User currently offlineXT6Wagon From United States of America, joined Feb 2007, 3392 posts, RR: 4
Reply 10, posted (7 years 2 months 3 weeks 1 day ago) and read 6944 times:

Quoting TPAnx (Reply 8):
Quick question...why does a freighter cost more than the pax model of the same plane? I'd think the opposite would be true...
TPAnx

Most have "options" like maximum MTOW, largest engines, etc. coupled with a development/certification cost that has to be supported by a fraction of the frames that the passenger models. The price would be more in line with a passenger model if say you KNEW that say a 787F was going to sell 500+ new build freighters off the start. Also the rate as which they sell is also important. 500 over 20 years is alot less desirable than 500 in 5 years and a 15year window of selling nothing.

Most new build freighters are not simple "don't cut out the windows and put in this big cargo door" design changes. Most have higher max landing weights that need extra design work. Stronger wings, etc to all deal with the operating cycle that is fairly unique to freighters. Even short haul planes like the domestic models of the 747 get a easier ride since they usually chop off alot of MTOW, which most freighters can't afford to lose.


User currently offlineZeke From Hong Kong, joined Dec 2006, 8870 posts, RR: 75
Reply 11, posted (7 years 2 months 3 weeks 1 day ago) and read 6909 times:

Quoting TPAnx (Reply 8):
Quick question...why does a freighter cost more than the pax model of the same plane? I'd think the opposite would be true...
TPAnx

They contain more structure, often with beefed up landing gear, a cargo loading system, and produced in lower volumes. A cargo conversion in the A300/767 size would normally cost 5-10 million. Passenger aircraft are often sold without any seats, toilets, galleys etc.

Quoting XT6Wagon (Reply 9):
777F which is what? 225M list price?

Nope not close from http://www.boeing.com/commercial/prices/ "777 Freighter 232.5 -- 240.0", average is just over 236.

Using your logic, the 330s would have gone for 157.5 million each, which is only a 10% discount. I think that is flawed logic.



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User currently offlineXT6Wagon From United States of America, joined Feb 2007, 3392 posts, RR: 4
Reply 12, posted (7 years 2 months 3 weeks 1 day ago) and read 6886 times:

Quoting Zeke (Reply 11):
Nope not close from http://www.boeing.com/commercial/prices/ "777 Freighter 232.5 -- 240.0", average is just over 236.

Thanks for the pricing. wasn't running exact numbers so...

anyway more or less proved my point that Airbus didn't have to discount to the bone to get this order.


User currently offlineKC135TopBoom From United States of America, joined Jan 2005, 12128 posts, RR: 51
Reply 13, posted (7 years 2 months 3 weeks 15 hours ago) and read 5496 times:

Quoting TPAnx (Reply 8):
Quick question...why does a freighter cost more than the pax model of the same plane? I'd think the opposite would be true...
TPAnx



Quoting XT6Wagon (Reply 10):
Most have "options" like maximum MTOW, largest engines, etc. coupled with a development/certification cost that has to be supported by a fraction of the frames that the passenger models.

Zeke has the correst answer why freighters cost more.

Quoting Zeke (Reply 11):
They contain more structure, often with beefed up landing gear, a cargo loading system, and produced in lower volumes. A cargo conversion in the A300/767 size would normally cost 5-10 million. Passenger aircraft are often sold without any seats, toilets, galleys etc.

The engineering and floor structure is very extensive.


User currently offlineJFK787NYC From United States of America, joined Apr 2007, 812 posts, RR: 2
Reply 14, posted (7 years 2 months 3 weeks 15 hours ago) and read 5407 times:

Ok why not just buying used planes instead of brand new?

what countries doing flying freighter operate in?


User currently offlineJFK787NYC From United States of America, joined Apr 2007, 812 posts, RR: 2
Reply 15, posted (7 years 2 months 3 weeks 14 hours ago) and read 5364 times:

Airbus has been offering the regular passanger version at 100million a frame

I doubt someone would pay a 75 million premium for freighter version

is there already a frighter conversion for the A330


User currently offlineStitch From United States of America, joined Jul 2005, 30584 posts, RR: 84
Reply 16, posted (7 years 2 months 3 weeks 14 hours ago) and read 5236 times:
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$175 million per A332F would be dead-on the average list price per AVAC. They state the value of a brand-new A332F would be $105 million, so it is highly likely the price quoted was list and the actual price paid was 35-40% less.

User currently offlineJfk777 From United States of America, joined Aug 2006, 8284 posts, RR: 7
Reply 17, posted (7 years 2 months 3 weeks 14 hours ago) and read 4894 times:
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While a respectable freighter, the A332F is lighter then the 777-200LRF. These two are really in two different categories. A 777F is just a bit smaller then the 747F while the A330F is just a bit bigger then an A300 or 767. Comapring the two is like a BMW 335i aginst a BMW 550i.

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