Boeing raises aircraft prices 5.2%, cancels short-haul 787
Boeing is raising aircraft prices by about 5.2 percent, the first increase in two years, and dropping the short-haul version ...
Boeing is raising aircraft prices by about 5.2 percent, the first increase in two years, and dropping the short-haul version of the 787 Dreamliner.
Higher costs for wages, goods and services are driving the price boost, said Boeing spokesman Jim Proulx. He confirmed the changes made to the price list on Boeing's website Monday, as well as the withdrawal of the 787-3 variant.
Boeing's last price increase, an average 2.6 percent boost, was for 2008, Proulx said. Prices were raised 5.6 percent in 2007. Most carriers and leasing companies get discounts.
"If I were an airline, I'd be reading this as a message that Boeing thinks it can get higher prices because demand is rising and supply is limited, but you'll still have the usual discussion over discounts," said Rob Stallard, an analyst at RBC Capital Markets in New York.
"Boeing and Airbus deeply discount to airlines, so theoretically they could raise list prices and boost the discounts, and it would all be the same," he said.
Boeing and rival Airbus are pushing production rates to records to work through a seven-year backlog of orders from carriers seeking to expand and refresh their fleets with more fuel-efficient jets. Demand is recovering this year after dipping in 2009 amid the recession.
In an upbeat 20-year outlook issued Monday, Airbus said it expects the international aircraft industry will recover faster than expected.
It predicted a global need for about $3.2 trillion in new passenger and freighter planes from all manufacturers over the next 20 years. That translates to nearly 26,000 aircraft, up slightly from a forecast for 25,000 planes valued at $3.1 trillion.
With Boeing's latest price increases, the average price for the smallest Boeing jet, the single-aisle 737, is about $71.4 million, up from about $69.3 million. The 777's list price rose to about $258.2 million from $246 million.
The two 787 models still being offered now average $201.7 million, up from $183.3 million, according to Boeing's website.
The 787-3 was designed to carry up to 330 passengers as far as 3,500 miles, compared with the 787-8's top capacity of 250 people and 9,400-mile range. Boeing has been reviewing the model's future after All Nippon Airways swapped its 787-3 order for another variant in January.
All Nippon had been the last carrier to hold an order for the 787-3, which was designed specifically for the Japanese market.
Boeing diverted resources from the short-haul model in 2008 as it struggled to move the long-distance 787-8 toward production amid problems with parts shortages, redesigns and incomplete work by suppliers. The Dreamliner's entry into service is running about three years behind schedule.
Boeing stock fell 37 cents to $63.79 Monday. The shares have tumbled 37 percent since the first Dreamliner delay was announced in October 2007.
Airbus' 20-year outlook was reported by Associated Press.