Boeing customers talk sales prices
Published 9:00 pm Monday, May 16, 2005
OK, I’m sure you’re all aware that Boeing’s published list prices are just a starting point for negotiations with its airline customers.
(Here’s a link to the list:)
http://www.boeing.com/commercial/prices/index.html
Boeing and its customers never announce exact sales prices, which makes it kind of a hide-and-seek game for us reporters to see if we can get a sense of what’s selling for how much. Sometimes an airline CEO will talk candidly about pricing, sometimes prices turn up on in shareholder documents issued by publicly traded companies, and sometimes governments that own airlines will release details of proposed deals to their local news organizations.
Recently, I’ve been seeing signs that Boeing’s coming off the list price by about 20 to 25 percent to win deals. Airbus, of course, is reputed to be willing to slash prices even farther — I just started reading a really long study that suggests it cut between 30 and 40 percent off A380 list prices to close some sales.
Today, Agence France Presse reports Garunda Indonesia airlines is close to a deal for six 777s and 18 737s.
http://www.forbes.com/markets/feeds/afx/2005/05/17/afx2032943.html
Key quote: “He said that the Boeing 777 costs around $150 million each while the 737s come at a price of some $40 million depending on specification.”
The prices the CEO quotes are about 10 percent below Boeing’s minimum list prices for its smallest, most-basic 777s and 737s. Boeing lists its 777-200 at between $165 million and $182.5 million, while its rock-bottom price on a 737-600 is $44 million, ranging up to $52 million.
A 10-percent discount off list price isn’t that big. Still, we’ll have to keep these prices in mind as we wait for Garunda and Boeing to close this deal.
But speaking of good prices, The New Nation of Bangladesh reports that a deal for three Airbus cargo jets and four Boeing passenger planes is soon to be considered by a government purchasing committee.
The newspaper says Biman Bangladesh Airlines will pay $90 million apiece for the 777s.
http://nation.ittefaq.com/artman/publish/article_18462.shtml
It’s hard for me to believe Boeing would come down 40 to 50 percent in price to win a deal for just four planes, but there it is. I’ll keep an eye out for more reporting on this deal — feel free to keep me apprised of anything you guys see about it.
