Date: 01 Dec 96 04:08:56 From: Robert Courteau <email@example.com> 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.