Airbus has confirmed the price premium for the 15% fuel burn advantage of the re-engined A320neo, a trend expected to continue as Boeing enters the market with its re-engined 737.
"We have a lot of the deals where we have standard and Neo within one contract, I can confirm we get a premium for the Neo with each and every deal. The business case is working very well for us," said Hans-Peter Ring, the CFO of Airbus parent EADS.
Airbus has accumulated orders and commitments for more than 1,000 A320neo aircraft since it launched the updated narrowbody with CFM International Leap-X and Pratt & Whitney PW1100G engines in late 2010.
The European airframer has sought to increase the A320neo price by approximately $7-8 million over the baseline A320, which is estimated to be one-half of the net present value of the lifetime fuel burn improvement.
Ring said: "Compared to the competition, I think with the current picture that we look into, we are very well placed with the A320[neo]."
"We are in a duopoly with Boeing and that will continue, and I think for the pricing it's more good news than bad news," he added, suggesting a battle over price would not drive down what both airframers charge customers for their respective updated narrowbodies.
Boeing expects to launch the Leap-X-powered re-engined 737 later this month when the company's board meets to authorise the airframer to offer the updated jet.
Further bolstering the Airbus pricing position, Ring added, is the investment profile the company is sharing with the engine-makers and is weighted significantly toward the powerplant development.
"The more efficient engine is the number one provider of the fuel burn advantage we can deliver, and on top it's the Sharklet we have on the airplane and some reinforcement of wings," said Ring. "Our investment is limited and probably more limited than the engine side of the investment."
Source: Air Transport Intelligence news
