In the midst of an era of newer and more efficient aircraft, where fleet renewals account for a large share of airlines’ budgets, it is important to understand how commercial airplanes preserve (or lose) their value over time. Detailing exactly how much a plane costs is a tricky task, but Condé Nast Traveler has spoken with Airbus to try to better understand what sets costs and what scenarios one of the planet’s most capital-intensive industries faces because, among other peculiarities, its main assets, the airplanes, represent an investment whose ceiling is the sky.
Airbus took almost 40 years to overtake Boeing in sales, although the world’s two largest aircraft manufacturers continue their rivalry in building the commercial jets that the majority of passengers fly. The European manufacturer managed, by the end of last year, to have its Airbus A320, which entered service in 1988, become the world’s best-selling commercial aircraft, surpassing its competitor, the Boeing 737, launched in 1967.
The market volatility and the FAA’s limitation on the production of mid-range single-aisle aircraft have positioned the European aerospace giant as the global leader. And it seems that its healthy state will endure for the long term, largely thanks to a solid performance from its commercial aircraft division. Last year, the manufacturer delivered more than 500 aircraft, and considering that airlines pay most of the aircraft’s price at the moment of delivery, this milestone is as significant as having positioned the A320 as the best-selling aircraft in aviation history.
And while we are flush with sales figures, not so much with aircraft prices: “sale prices are tied to the specific characteristics of each contract, the version of the aircraft and its configuration,” Airbus explains. The opacity of the actual cost is linked to the fact that the price of a plane is the result of a series of factors, including manufacturing costs and bilateral negotiations with the customer regarding the type of aircraft, the level of customization selected, the engine choice and service packages. And they add: “the mechanism of supply and demand has a limited impact on price, since aviation is not a commodities market. It is a long-term investment by airlines.”
