Tags: Airbus Raises Aircraft Prices on Weak Dollar

Airbus Raises Aircraft Prices on Weak Dollar

Tuesday, 18 Jan 2011 09:58 AM

Airbus announced an average 4.4 percent increase in its aircraft catalog prices on Tuesday, citing high production investments and a weak dollar.

The move comes weeks after rival planemaker Boeing announced an average 5.2 percent price increase.

Airbus and Boeing, which both saw a sharp recovery in business last year, often sell planes at a discount to catalogue prices, but Airbus sales chief John Leahy said on Monday that both revenues and market pricing were improving.

Airbus had 52 percent of the world market in net orders and 52.5 percent in deliveries in 2010, according to data released on Monday.

Airbus is squeezed financially by a weak dollar because planes are sold in dollars and enter the EADS accounts in euros — a currency in which it also has a high proportion of its production costs.

The overall price hike includes an 8.4 percent increase in the value of the Airbus A380, which brings the catalogue value of the world's largest airliner to $375 million.

Airbus said this reflected the plane's capacity to generate revenue for airlines, but the planemaker has also been struggling to bring down unbudgeted production costs in the past year.

Airbus also confirmed on Monday it was mulling a 10 percent hike in production of its best-selling A320s, on top of existing plans to raise output from 36 planes a month to 40.

A decision is due shortly on whether to boost production as high as 44 planes from 2012, senior executives said.

The plans, first reported by Reuters last November, echo rising demand as airlines recover more quickly than expected from recession. But they are also seen as an extra bulwark against a weak dollar alongside price hikes.

Industry sources say a majority of Airbus's variable costs on the single-aisle family production lines are in dollars, meaning higher output also helps to tame currency effects.

Airbus meanwhile received a potential boost on Tuesday when Boeing announced a further delay in first delivery of its 787 Dreamliner to the third quarter.

Delays in the futuristic, lightweight Boeing plane have boosted sales of Airbus A330s, a previous generation of mid-sized jets whose list price rises to $222 million.

© 2017 Thomson/Reuters. All rights reserved.

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Airbus announced an average 4.4 percent increase in its aircraft catalog prices on Tuesday, citing high production investments and a weak dollar. The move comes weeks after rival planemaker Boeing announced an average 5.2 percent price increase.Airbus and Boeing, which...
Airbus Raises Aircraft Prices on Weak Dollar
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