How much does that new Boeing or Airbus REALLY cost an airline?

[SteveJohnson]

After this morning's Qantas announcements on cancelling those 35 Boeing 787s it was reported they would save around $8bn but that this was the official list price and doesn't allow for discounts because no airline pays full price for the new jets.

I remember seeing an article about how much a new Boeing or Airbus really costs, or rather the fact that nobody says how much they really cost, and just went looking for it. It might be interesting reading.

The Secret Price of a Jet Airliner

Discounts of 50% or More Off the Sticker Number Are Common as Plane Makers and Buyers Haggle

How much does a new airliner really cost?

When Airbus and Boeing Co. BA -0.64% announce orders at the Farnborough International Airshow this week, they will value the deals based on the planes' catalog prices—which no one pays. Airline executives, when pressed for details, will probably say they got "a great deal." But actual terms will remain guarded like nuclear launch codes.

The aviation industry's code of silence on pricing is notable in this era of information overload. Thousands of people world-wide are involved in airplane purchases, yet few numbers spill out. That yields much mystery and speculation.

"The whole model is wacky," says Robert Milton, chairman of Air Canada parent Ace Aviation Holdings Inc., ACE.T +1.47% who says he approximates the real price of announced multibillion-dollar orders by cutting the stated value in half.

The Mystery of Flight: How Much Airplanes Cost, the Secret Price of a Jetliner - WSJ.com

 

[casanovawa]

You'd sort of wonder how airlines could put figures in their forward balance sheets, ASX announcements and annual reports on aircraft purchases etc using numbers that they know aren't real and just putting an asterix about list prices...

I guess there is some clause that allows them to fudge the figures is there???

 

[simongr]

Well what is actually reported is what they actually received. Also they could report deliveries without fudging the revenue amount.

 

[yohy?!]

i imagine they use the list prices to make it sound like a bigger saving in the PR verbal diarrhea then hide the actual savings somewhere on page 9999 of appendix XYZ