airlineecon
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Disclosed Airbus Selling Price

Thu May 10, 2007 6:25 am

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]
 
WestWing
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 6:35 am

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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XT6Wagon
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 6:48 am

175million sounds like a list price, not a discounted price
 
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scbriml
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 7:05 am

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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aminobwana
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 7:13 am

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
 
manni
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 9:46 am

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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XT6Wagon
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 9:58 am

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.
 
manni
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 10:01 am

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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TPAnx
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 10:32 am

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
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XT6Wagon
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 10:44 am

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.
 
XT6Wagon
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 10:56 am

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.
 
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zeke
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 11:06 am

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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XT6Wagon
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 11:10 am

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.
 
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kc135topboom
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 8:41 pm

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.
 
jfk787nyc
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 8:49 pm

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

what countries doing flying freighter operate in?
 
jfk787nyc
Posts: 478
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 8:52 pm

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
 
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Stitch
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 9:04 pm

$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.
 
jfk777
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RE: Disclosed Airbus Selling Price

Thu May 10, 2007 9:41 pm

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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