Prices for commercial aircraft, which have already surged in recent years due to disruptions in supply chains during the pandemic, are expected to rise further as Boeing and Airbus navigate through trade tariffs.
An aviation analyst, speaking to AFP on the condition of anonymity, noted, “Since 2018, the cost of commercial jets has escalated by approximately 30 percent.”
The leading aerospace manufacturers from the US and Europe have been facing elevated costs for essential materials like titanium, as well as a rise in energy prices and overall labor expenses.
To resolve a labor dispute, Boeing reached a new agreement with its machinist union in Seattle late last year, which included a pay increase of 38 percent over four years.
Similarly, Spirit AeroSystems, a key supplier for both Boeing and Airbus, also negotiated contracts that included notable wage increases.
Richard Aboulafia, managing director at AeroDynamic Advisory, mentioned that certain materials, particularly castings, forgings, and titanium, have seen significant price hikes, especially following the reduction of Russian supplies to the US and, to a lesser extent, Europe.
According to Aboulafia, the cost of materials and equipment has surged by 40 percent since 2021, not accounting for Trump’s 25 percent tariffs on steel and aluminum used in aviation.
“It’s ironic; raw materials weren’t an issue, but now they are a focus due to Trump’s tariffs,” Aboulafia remarked.
Inflation within the aviation sector has been accelerating, and John Persinos, editor-in-chief at Aircraft Value News, concurred, stating, “This inflation is only going to worsen with the introduction of these tariffs, which are extremely damaging.”
Furthermore, modern aircraft such as the Boeing 737 MAX, 787 Dreamliner, and Airbus A321neo can command higher prices because of their improved fuel efficiency.
Catalog Prices are Misleading
The effect of tariffs is not reflected in the companies’ outdated pricing documents.
Boeing has not revised its pricing since 2023, and Airbus has not updated its catalog since 2018.
Aboulafia criticized the catalog prices, saying, “They are essentially fictitious. You could get a 50 percent discount just by looking good when you show up.”
Airbus decided to stop using catalog prices “long ago” because those figures did not accurately reflect the end prices, which varied based on individual contracts regarding aircraft configuration and specifications, as stated by the company.
According to the anonymous expert, aerospace companies often negotiate additional services like aircraft support or training at discounted rates when delivering planes.
Such arrangements lessen the significance of the official listed prices, they noted.
Contracts for new aircraft often incorporate clauses for adjusting for inflation, and prices may be modified if there are delays in deliveries.
As contracts are usually stated in dollars, there can also be considerations for fluctuations in exchange rates.
Boeing informed AFP that it assesses prices based on production costs and market conditions, but prefers not to disclose specifics due to competitive reasons.
Currently, both Boeing and Airbus have a significant backlog of orders that will keep them busy through the end of the decade, yet the strong demand has not substantially influenced pricing.
“The competition is quite intense,” the expert stated. “Both companies are vying for each order, which affects pricing dynamics.”
Many airlines choose to work with both Airbus and Boeing.
Manfred Hader from Roland Berger consultancy mentioned, “Prior to the pandemic, pricing was quite low—perhaps even too low—as Boeing and Airbus competed fiercely for market share.”
However, with the rebound in travel demand following lockdowns, airlines are now more capable of purchasing pricier planes, which in turn has led to increased ticket prices and enhanced airline profitability, Hader added.
In February, Japanese airline ANA placed an order for 77 aircraft from Boeing, Airbus, and Brazilian manufacturer Embraer, reflecting updated catalog prices that indicate a rise from previous levels.
This order set the price of Boeing’s 787 Dreamliner at approximately $386 million and the 737 MAX at $159 million, compared to earlier prices of $292 million and $121.6 million in 2023, based on AFP’s calculations.
The cost of the Airbus A321neo was about $148 million versus $129.5 million in the 2018 catalog.