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Airbus List Prices Rise By Only One Percent

January 23, 2017

Limited Rise Continues to Impact Used Values

With Airbus list prices rising by an average of only one percent for 2017, this results in new net pricing remaining static and continued downward pressure on used values.

In 2016 Boeing failed to see any reason to increase list prices and Airbus increased their prices by only one percent. This sustained absence of any rise has an impact on the prices actually being paid by customers, the escalation used for existing orders and ultimately, used values. For 2017 the average rise published by Airbus amounted to only one percent with the highest rise being attributed to the A350-900 which saw a 1.3 percent rise though this compared to a slightly below average rise in 2016 of 0.8 percent.


The gap between list prices and values of new aircraft continues to widen. The average discount, when comparing the list price and value, is now 54 percent. In 1991, the difference was much more marginal. List prices rise virtually every year whatever the state of the market and is largely an arithmetic function being determined by rise in labor, materials and energy. Changes to the specification can also have an impact on list prices as more optional items are added as standard or as weights increase or new engine variants are introduced. The most significant differences between list and values lies with the A330 aircraft. The values of new A330ceos have been falling in the last year such that values for the A330-300 are now below $100 million having previously been nudging $110 million. The values of the A330neo have also fallen slightly. The values of the A350-1000 have also experienced a modest fall over the previous year given the discussions over a stretch and limited order intake though there have also been few orders for the B777X.

List prices for the A318 continue to be indicated although there have not been any orders for the commercial variant for a number of years. In terms of the differential between A320ceo family list prices and those indicated for the A320neo these remain the same. The difference between the A320ceo and A320neo remains the same at approximately $9 million; $9m for the A319; but $11 million for the A321.

Inflation remains an important consideration in determining future values of used aircraft as, to a greater or lesser extent, there exists a correlation between the two. In the early 1990s the residual value forecasts of GPA relied on the assumption that the values of new aircraft would rise by some five percent each and every year. While list prices did continue to rise in the early 1990s, because of the frail economic conditions, values did not. Conversely, in the early 1980s values of used aircraft remained comparatively high despite the weak economic conditions because high – hyper even – inflation was forcing prices of new aircraft ever higher and used values had to keep pace. Inflation has been low for a number of years and this has had a direct effect on values of used aircraft. With list prices of new aircraft failing to increase this will continue to ensure that values of used aircraft will remain under pressure. However, some residual value models continue to use the prevailing rate of inflation for the entire period of the forecast. Inflation rates change and any future value model needs to assume a fluctuating rate.

As list prices are failing to rise this also raises the question of whether escalation of aircraft already on order is seeing any significant increase. The interval between order and delivery runs into a number of years and previously the base price on order placement sees escalation being applied through to delivery such that there may be a ten percent or more increase. There exists the possibility and actuality that the price being paid for newly delivered aircraft due to escalation can exceed the value of such aircraft by a significant margin. This can cause problems for lessors in particular who may be forced to lease aircraft at lower than expected rates. The next year is expected to remain difficult suggesting that there will limited inflationary pressures unless fuel prices increase.

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