I would like to express my firm disagreement with the implication of very limited price increases (2.5%) in the statements in the last paragraph of the Max Kingsley-Jones article about Airbus (Flight International, 21-27 January).
Airbus and the other manufacturers have been steadily increasing their prices over the years by their (mis)use of that wonderful-for-the-seller invention called an escalation formula. Lessees of new aircraft have been especially mistreated by Airbus in this regard in the 2001-2 period because generally their pre-agreed lease rates for undelivered aircraft or new aircraft being delivered will be subject to uncapped manufacturer escalation.
For the period January 2001 to May 2002, Boeing escalation was about 3.3%, Embraer for January 2001 to September 2002 was stated to be 2.35%, but Airbus for the period January 2001 to August 2002 was 7.1% and for January 2001 to January 2003 was 8.6%. Who needs to announce price increases when you can misuse statistics in this way?
Airbus agreed with Finnair that the unreasonable increase was a "statistical abnormality", but would it recant and agree escalation that was in some relation to reality? No.
In a tight market I am not sure how long this gross mistreatment of customers can continue. I feel that all airlines and lessors buying new aircraft should band together to fight the totally unreasonable Airbus attitude and introduce reasonable caps on allescalation formulas.
Colin Molloy Assistant vice-president - aircraft trading Finnair, Helsinki, Finland
Source: Flight International
