|Quoting Coronado (Reply 68):|
Delta as far as I can calculate got an average 58% discount (i.e. paikd 42% of list price) on their 120 737-900ER and their 45 A321, paying between $42 and 44mm each. This is end of the line pricing.
I guess rather than focus on the discount can any one tell me why list prices are so stupidly high? To me list prices are insane. You might as well say that a Ford Fiesta should have a list price of USD40000.
Everybody talks about this order being worth $2bn at list prices. Nobody has paid list price, nor more than 55%-60% of list price on a 737NG for ever. List prices are the biggest bogus numbers in aviation.
List prices on cars and on airplanes are not even comparable. It's apples and oranges. Nobody walks into a Ford dealership and expects a 50% discount on a brand new car. And the planes you're talking about, the 737-900ER and the A321 are not the same as the 737-700, which is the model we're talking about. What discount they got on these models is completely irrelevant. What is relevant is what discount they got on the -700, because that's the model which is directly competing against the CS300.
Everyone knows list prices are list prices, and what you end up paying is something completely different. But I'd like to see numbers from you backing up your claim that nobody has ever paid more than 55-60% of the list price of a 737NG. That's a very bold claim to throw out there.
|Quoting roseflyer (Reply 66):|
There is no way that an outsider can determine if they were selling at a loss or not. It is also virtually impossible for a news website like Leeham to understand how much the price was discounted and what the actual purchase price was. This is what WSJ said: The paper also reported that UAL might order some twin-aisle jets to “offset” the low prices of the latest 737-700 order. As last year came to a close, Boeing salesmen were hopeful to land another order for 10-13 777-300ERs to help bridge the production gap.
It sounds like Boeing sold one airplane at a bargain rate to secure orders for another. No one will know if this was for a loss and I don't think you can definitely say that. The purchase price is not know. When an airline makes an order, included in that price is the cost of entitlements like maintenance documents, training services, etc. An airline can waive those entitlements and use the money for other purposes. UA probably doesn't need any training, and the cost of configuration on the additional 737-700s is probably nothing since that cost was included in the previous order. UA also recently ordered 777s and could be using some of the entitlement costs from that order to get a better price on the 737-700s. Airplane sales contracts are complicated and have many terms.
From the very same article: "Then Boeing swooped in and sold 40 current generation 737-700s to UAL at what LNC was told was priced in the low-to-mid $20m, well below what BBD could offer. There were also other considerations, LNC was told." We don't have anything else to go by than Leeham's word regarding the purchase price. There's no point in trying to discredit the article, and then try to defend the content.
If Boeing sold brand new 737-700s to United Airlines for $20-25 million, that would almost definately be a loss. We all know airlines don't pay list price unless they need a plane right here, right now and are not willing to wait for an open production slot. But according to your logic, the list price might not be a loss.. which means Boeing's price for the aircraft includes a 350-400% markup. That's just not credible. Buy a brand new 737-700, get 3 for free! No.
Boeing sold the -700s at this price to kick the chair out under Bombardier's C-series. They could just as well have given them away for free, which I think they would if it was legal.
|Quoting DfwRevolution (Reply 72):|
Spying on Bombardier would be playing dirty. Stealing data from Bombardier would be playing dirty. Lying to customers would be playing dirty.
Offering a better deal is not playing dirty.
You bet they're spying on each other. They all are. But that's not what we're talking about.
Offering a good deal is not playing dirty, but offering a deal where you sell 1 aircraft, and give away 3 for free... at an almost certain loss, at a time you are laying off hundreds of workers, and then blame it on Airbus aggressive pricing.. just to squeeze out the competition's superior product. That is playing dirty.
|Quoting N1120A (Reply 77):|
Did you dislike Airbus for the original Frontier deal? JetBlue? EasyJet? Republic?
I dislike it when any duopolist mega company squeezes out the little guy by selling products at a give away price. I would be similarly upset if Airbus did the same thing. The examples you're providing are not even comparable. I don't know the Republic case, but regarding the others it was Boeing vs Airbus. Two similarly sized companies who shared the marketplace between them, and where one side was reluctant to sell (Boeing), while the other jumped at the chance and offered a good deal. This is not even remotely the same situation.