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July 14, 2024
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Airbus announced their 2016 pricing and they added a 1.1% increase across the line.   So what does this look like? After all, no customer pays retail.

Since each customer deal will see prices vary by many factors, we will stick to the retail prices to illustrate our points. Let’s start with single aisle aircraft pricing since 2010.


To better illustrate the changes over the period we created the following chart. This way a reader will notice two things: 2016 price increases are lower than previous years and Airbus has kept the “premium” on the neo models steady.


So far, so good. However, there is another way to look at this data and discover something. Look at these prices on a per seat basis and watch how things change. As the next chart illustrates the smaller aircraft are really expensive. This is not a shocker as one would expect this. But the variance is interesting.

The A318 pricing per seat (100 seats) is prohibitive enough that airlines simply don’t buy it in any numbers. Even if there are big discounts off list. The A319 (124 seats) is equally expensive – especially the A319neo.

2016-01-18_11-07-38Airbus’ single aisle pricing shows that for the A319neo they have steadily gone for a 10% premium, on the A320neo the premium has been 9.5% and the A321 premium has been 9.4%. Airbus has seen high success for A320neo and A321neo sales against the 737 MAX. The value proposition is straight forward. The A318 and A319 are less attractive as people movers.

Next let’s look at the twin aisle market. The table below shows the pricing. Note that Airbus went through some product changes over the period. There was the A350-800 which is still listed on pricing documents but is not being marketed. As the A350-800 was wound down, the A330neo (800 & 900) came on stream.


As before we illustrate these numbers in a chart. We can see Airbus has also slowed its price increases on twin aisles. Whereas Airbus has seen strong market share growth in the single aisle market, it has been less successful in the twin aisle market.


Next, looking at the cost per seat we have the following chart. There is no surprise the A380 has the lowest cost per seat by far. Note though that Airbus used to show this aircraft with 525 seats, and this now shown as a 544 (4 class) seat aircraft. The pricing change that stands out is that of the A350-1000. It was initially at a lower cost per seat than the A350-900 but has traded at a premium since 2012. Until Virgin Atlantic announces its order, this aircraft has seen few orders for a few years. Note also the premium on the A330neo versions. The neo versions are priced at 4.7% and 8.3% premiums respectively. These premiums are far lower than the single aisle aircraft because the 787 is so competitive.   A principal role of the A330neo (as explained to us at the last Farnborough show) is to spoil 787 pricing.


As we stated at the start of this story the prices we are using here are list and nobody pays list. Every campaign will be driven by all sorts of variables, like volume of orders and the significance of the customer. Every deal is actually a battle on an ongoing war. But the list pricing acts as a useful guide.

For example, the A330neo is a case in point. Airbus argues this segment is a workhorse arena and more cost driven than other twin aisle segments. Hence it offers the A330neo against the 787 – because many airlines fear technology implications and the associated costs. For example, we could argue Air India might have been better off with the A330neo (had they been available) than 787s. TAP switched from A350s to A330neos perhaps because the airline did not need the A350’s advanced capabilities, but still wanted fuel savings.

Indeed, Airbus has increased the price of the A330-200 by 21% between 2010 and 2016, and the A330-300 price by 20.7%. By comparison the A350-1000 and A380 are up by 24.7% and 24.9% respectively. Both have had a tough time making sales.

The view on A380 pricing was well put by IAG’s Willie Walsh today in Dublin. The aircraft is valuable, like any asset, if it is priced right. And Airbus’ list is too high for BA to consider more new A380s – even though it would get a great discount.  While the cost per seat for the A380 is low, airlines are fearful of not being able to fill it – hence the hesitation in ordering an aircraft with high trip costs.  As we mentioned in a previous analysis, a used A380 may be a bargain.

In the end, every commercial aircraft is a workhorse and even if list prices go up, it means little.   Airlines and lessors are only going to buy at a price point that allows them to make a positive ROI most of the time. Running an aircraft fleet is high risk and airline margins (until very recently) have been routinely awful. Real world pricing therefore deeply discounts off list price to offset the perceived risk and industry volatility. Airbus (and its competition) don’t build anything worth a premium for long. Airbus has one product currently that trades closer to list in the A321neo – but not for long if Boeing can help it.

1 thought on “Airbus Pricing

  1. Clearly, where Airbus is aiming to collect hard contract closing proceeds is from A321 NEO sales, where the list price is 125.7 M$, where there is so to say no competition and which is selling faster than hot donuts ! So there is little need to yield to price meddling from buyers. The A321 is the Airbus Milk-Cow by excellence!

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