Airbus to Increase Aircraft List Prices

On Tuesday, Airbus announced a general price increase for its aircraft. On top of the 2.74% normal escalation for the year 2007, the price increase comprises an additional two million US Dollars per single-aisle aircraft and four million US Dollars per wide-body long range and A380 Family aircraft. The new pricing will apply from 1 May 2008.

The price increase is mainly triggered by the weak US currency and the overall increase of world market's raw material prices - especially with regards to metal. It is the first time since 2003 that Airbus has applied a price increase above escalation.

The US dollar is at its lowest rate in 20 years. Over the last 12 months the Euro vs. US Dollar exchange rate moved from 1.35 to almost 1.60, which translates into a devaluation of more than 15%. Prices for metal-products (aluminium plates, stainless steel etc.) have gone up by at least 6.5%, and costs for industrial products in the euro-area increased by 5% in the course of 2007. Titanium, steel, aluminium, aluminium-lithium still account for at least 40% by weight in modern aircraft design.

"We have to keep pace with the world market price developments and secure profitable deals," said John Leahy, Airbus' Chief Operating Officer Customers. "Additionally, our modern portfolio of aircraft is delivering an excellent return on investment and an outstanding value for money to our customers. Our state-of-the-art aircraft are setting the benchmark regarding eco-efficiency, delivering more value with less environmental impact, and providing more with less. This translates into real savings, since fuel expenses today can be up to 40% of an airline's operational cost."

At the end of March, Airbus has sold over 8,800 aircraft to more than 370 customers and operators and has delivered over 5,100 aircraft since it first entered service in 1974. Its backlog stands at above 3,700 aircraft, securing up to six years of production.

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