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Author Topic: 777 tax?  (Read 607 times)

Offline ArcherII

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777 tax?
« on: September 27, 2016, 10:31:08 PM »
It's been some time since I last played the game, but I still see an inconsistency regarding the 777 prices, compared to it's competitor A330/340 (they are the competitors, not the MD11).

While the on-demand A330 is sold at 168M the most expensive, the B772A is sold at 214M while being less fuel efficient and heavier.

The A343 competes vs the 772ER both in capacity and range. The 340 is yours at 211M the most expensive, but the 77E is given away at the discount price of 243M the cheapest at a similar range to the A343 (not really).

There's a whooping 439 777s flying and 698 produced in total with 904 new orders. You could argue that the model is just starting to operate. Well, precisely.

The A330/340 is sadly doing very bad, a total of 1725 across al models flying and 2125 produced since the first one rolled out of factory. It really shows that the model is dead, 1736 new orders for Airbus. Truly a financial disaster.

Wait, it gets better, the A346 is selling at 220M. I wonder what would John Boeing say about the B77W price...

My understanding of the pricing system is that it is driven by demand. We can see it in the 320 vs the 738, especially since the latter is just getting certified.
My problem with this is that I have never ever seen the A330 rise its prices according to the orders received, compared to the 777s. The A332 is still far cheaper than the 763 even though it has 940 unfilled orders (it hasn't been certified yet), granted the 763 nuber rises to 1900 acft flying (since the late 80s...).

Is the 777 price hardcoded to be more expensive than the 330/340? I know it is IRL but, since this is driven by demand, why has the 330/340 never got to the level of the 777?

Offline fark24

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Re: 777 tax?
« Reply #1 on: September 29, 2016, 03:01:24 PM »
If you are looking for a real-life analogy then don't just look at the airframe. Also include the engines.

In the A340-300 vs. B777-200ER example, the Airbus uses 4 CFM56 engines that, at 2016 prices, list for about $10M each per Wikipedia ($40M total). The GE-90 lists for $27.5M in 2011 dollars - which comes out to about $29.5M in 2016 dollars. So $59M total for the engines.

That's about a $19M difference right there.

Offline Sami

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Re: 777 tax?
« Reply #2 on: September 29, 2016, 03:14:44 PM »
In regards of dynamic pricing:
A330-200 price is currently 18% elevated due to the demand, but it will probably get higher since it's a new model.
B777-200 is currently +30%, which I believe is the maximum what the dynamism will make.
(edit: A330-300 is also at +30%)

List prices in database say that 777-200 standard list price is about 30% higher than of A330-200 and about 20% more than A330-300. B777 is traditionally much more expensive to purchase in real life, when considering the list prices.

The main thing what matters to the new a/c price dynamics is the number of pending orders for that model/fleet. (It does not consider how many have been produced and how many are available as used.)
« Last Edit: September 29, 2016, 03:22:39 PM by Sami »

Offline ArcherII

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Re: 777 tax?
« Reply #3 on: September 29, 2016, 09:24:31 PM »
Fair enough, thanks for the explanation.

Offline gazzz0x2z

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Re: 777 tax?
« Reply #4 on: September 30, 2016, 07:06:43 AM »
The 777 is called "the rolls-royce of very long range" by some pilots I know. This nickname is not random.


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