Plane makers slash prices

Scott Jagow Apr 20, 2007


SCOTT JAGOW: Attention shoppers, we have a blue light special on jumbo jets. They’re in aisle five next to the cookware. Actually, Boeing and Airbus are having a huge airplane sale. Boeing’s giving a one-third discount on the 787 Dreamliner. Airbus is slashing prices on the A350. It’s even offering a 2-for-1 deal with the A380 super jumbo. Joining us from London, David Robertson. He covers the airline industry for the Times of London. David, is this normal behavior?

DAVID ROBERTSON: Discounting is very common, both Boeing and Airbus do it on all their planes. You have the list price which is what they officially sell for and then you have an actual price which is negotiated with each individual airline.

JAGOW: But offering 2-for-1?

ROBERTSON: Yeah well that just demonstrates how important it is for Airbus to get back into the battle with Boeing. Boeing has got an enormous head start on the midsized aircraft, the 787.

JAGOW: And the A350 is the equivalent of that?

ROBERTSON: They’re not the direct comparisons but it’s as near as.

JAGOW: But there seems to be another motivation here which has to do with the A380, the big super-jumbo jet that has been delayed so much. Is Airbus trying to appease buyers who are pretty upset with the delays with that plane?

ROBERTSON: Oh yes very much so. The A380 is so late that all the contracts signed are now void. So what Airbus is doing, they’re basically trying to encourage those airlines to stay on board with the A380. You hold onto those A380s and we’ll give you a really good deal on the next planes you buy. And for airlines like Emirates which are buying a lot of planes, that’s potentially a very, very good deal.

JAGOW: OK David Robertson from the Times of London, thank you.

ROBERTSON: Thank you.

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