Re: Airbus on a roll

Date:         01 Dec 96 04:08:56 
From:         Robert Courteau <engrc@poster.cae.ca>
Organization: CAE Electronics Ltd
References:   1 2 3 4 5
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In this *retail* vs *discount* price discussion, one should keep in mind
that price is only one of the many elements in an airplane deal... Many
other things come into the picture - mainly "credits", which allow the
buyer to acquire parts, services, etc. from a pre-established supplier
list, for "free". So if I buy 20 aircraft at total declared price of $2
billion, it doesn't actually mean I'm paying a straight $100 mil per
a/c; I might be getting millions in spares in the deal, and nobody else
than the seller and the buyer can see that.
If, for example, UAL paid what looked like a high price for their B777s,
it's because Boeing had no intention of sending a "see how little you
can get them for" message to the industry right after launching the
programme; but the real price (the total amount of stuff you get divided
by the total amount of money you pay) may have been much lower. By the
same token, Airbus may well want to send a "come and get them for cheap"
message by declaring a very low contract value for the USAir deal; but
maybe USAir gets very little else than a bunch of aircraft for that
price.