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Author Topic: [-] Price increase with popularity  (Read 686 times)

Offline NovemberCharlie

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[-] Price increase with popularity
« on: November 02, 2014, 08:08:24 PM »
Hi all,

As the 787-10 just got launched I was looking into how much it would cost me and I was quite frankly shocked!
25 million for one leased aircraft! This comes down to a list price of 364mln
Since I am also considering adding A380s I also looked at that price: 295mln...
This in itself I find weird, but it got me thinking: especially with the immediate orders from ultra rich CEO's for literally hundreds of aircraft that this system is a bit unfair as the current leases value makes me doubt whether I could profitably run it...

Would love to direct purchase but at my profits I'd have bought only a handful by the certification time!
This system severely disadvantages smaller airlines who try to work their way up, especially with large airlines ordering large and unnecessary amounts!

Kind regards,

NC
« Last Edit: January 15, 2016, 01:07:57 PM by sami »

Offline gazzz0x2z

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Re: Price increase with popularity
« Reply #1 on: November 03, 2014, 07:55:06 AM »
IMHO, the real bug is the non-correlation between used & new prices. In GW3, I can buy brand new A148A for 15M piece, while used are around 20M. And a buddy from my alliance had to raise the price of its 5 yrs old A148A to 17,9M so that I could purchase its plane.

That planes that everyone wants are going up to insane prices is really normal, IMHO. It should push you to look for alternatives. Some of the big boys in GW3 still buy A300s. Because, despite their higher functionning costs, they are (1)available & (2)cheap to build(production line has been optimized, continuous build from 1989 to 2013 and ongoing).

Offline NovemberCharlie

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Re: Price increase with popularity
« Reply #2 on: January 02, 2015, 05:03:49 PM »
Done a bit of reading on Leeham news. What seems like a reasonable explanation why list prices have gone up so high is discounts. As real world airlines get bigger and bigger discounts (easily up to 50%), OEMs increases list prices to ensure they still receive their fair share....
Since we do not receive discounts this should be taken into account, either by lower list prices or higher discounts...

Cheers
NC

Offline schro

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Re: Price increase with popularity
« Reply #3 on: January 02, 2015, 05:16:37 PM »
Done a bit of reading on Leeham news. What seems like a reasonable explanation why list prices have gone up so high is discounts. As real world airlines get bigger and bigger discounts (easily up to 50%), OEMs increases list prices to ensure they still receive their fair share....
Since we do not receive discounts this should be taken into account, either by lower list prices or higher discounts...

Cheers
NC

I've described that over and over and over throughout the forum here over the years and it seems to have fallen on deaf ears. The average discount has increased significantly as the list price of aircraft has skyrocketed....

Offline Sami

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Re: Price increase with popularity
« Reply #4 on: January 15, 2016, 01:07:44 PM »
The price of the new aircraft is dynamic and updates once a week. The system checks the number of orders on the production line, and a high number of orders increases the price - and vice versa.

The price can flex up to *1.3 of the original (database default) price, and even down to *0.5 if there are not that many orders. There are also many other tweaks in this to promote ordering of planes that are unpopular or where production is about the cease soon.

In current GW#1 for example A380-800 is a bit cheaper than 787-10. There's a backlog of 740 orders for 787 and only 69 for A380 (with slots available immediately).  ...hence the 'price factor' for A380 is about *0.73 at the moment while 787 is at *1.16.

Like mentioned the price updates once a week so naturally early orderers do have an advantage; if you order it right at the launch there is no queue, normal price, launch customer discount etc.

Not a bug.

 

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