Khaleej Times

Boeing skips annual jetliner price hike amid sluggish sales

- — Bloomberg

CHICAGO — Boeing skipped raising airplane prices for the first time in seven years as it contends with demand cooled by economic uncertaint­y, cheap oil and a glut of twin-aisle aircraft.

The US planemaker typically adjusts its catalog prices for commercial aircraft once a year to reflect an internal formula that takes into account increases in the costs of goods, services and labour. Boeing boosted prices 2.9 per cent last year and 3.1 per cent in 2014.

While final sales usually are heavily discounted, Boeing’s decision to hold the published prices steady for the first time since the Great Recession signals changing market dynamics to customers and suppliers, said aerospace consultant Richard Aboulafia.

Planemaker­s have seen demand clipped by the Brexit vote, a commoditie­s market crash in Latin America and moderating oil prices, which have encouraged carriers to hold on to older models they might have otherwise retired.

“The industry is a poster child for deflation at this point,” Aboulafia said by telephone Monday. “You can deny that when times are good but when times are clearly past their peak there’s really no point in pretending.”

The prices posted in July 2015 will continue to serve as a basis for customer discussion­s, Boeing spokesman Doug Alder said via e-mail. They range from $80.6 million for Boeing’s smallest narrow-body aircraft, the 737-700, to $400 million for the 777-9, the first twin-engine plane designed to haul more than 400 travellers.

“From time to time, we do not process an update to our pricing catalog. Boeing didn’t publish an update in 2001 or 2009,” Alder said. “Our goal is to set the standard for value and service for our customers.”

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