With Boeing and Airbus continuing to aggressively price their narrowbody models, despite being a duopoly, pricing pressures are also impacting the A220 (nee C Series) as it competes at the lower end of the narrow-body market.
While the A220-300 is quite cost-effective and economically exceptionally competitive, its margins were not what Airbus needed given the price at which it can currently sell the aircraft. It simply cost too much. As a result, Airbus
initiated discussions up and down its supply chain last year to reduce the costs of components and materials to increase margins on the aircraft. How has Airbus fared?
The company has been quite successful in its initial efforts, although additional cost reductions will be required down the supply chain for an effective transition. This will likely translate to lower unit prices for some suppliers as production continues to ramp-up to the goal of 14 per month.
With Boeing and Airbus continuing to aggressively price their narrow-body models, despite being a duopoly, pricing pressures are also impacting the A220 (nee C Series) as it competes at the lower end of the narrowbody market.
While the A220-300 is quite cost-effective and economically exceptionally competitive, its margins were not what Airbus needed given the price at which it can currently sell the aircraft.It simply cost too much.As a result, last year Airbus initiated discussions up and down its supply chain last year to reduce the costs of components and materials to increase margins on the aircraft.How has Airbus fared?
The company has been quite successful in its initial efforts, although additional cost reductions will be required down the supply chain for an effective transition.This will likely translate to lower unit prices for some suppliers as production continues to ramp-up to the goal of 14 per month.
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