Key points
- Aerospace giants grapple with higher expenses
- Prices for materials and equipment rose 40pc since 2021
- Inflation in aviation has been accelerating
NEW YORK, United States: Commercial plane prices, already lifted in recent years due to pandemic supply chain shocks, are poised to climb further as Boeing and Airbus are buffeted by trade tariffs.
“Compared with 2018, prices for commercial jets have risen by around 30 per cent,” an aviation expert told AFP on condition of anonymity.
The American and European aerospace giants have grappled with higher expenses for primary materials such as titanium, components and energy, as well as overall labour cost pressures.
To resolve a labour strike, Boeing late last year agreed to a new contract with its Seattle-based machinist union that lifted wages by 38 per cent over four years.
Just months earlier, Spirit AeroSystems, a major supplier to both Boeing and Airbus, reached an agreement with similar wage increases.
“High rate”
Richard Aboulafia, managing director at consultancy AeroDynamic Advisory, said items that have inflated “at a particularly high rate” include castings, forgings and “anything titanium… especially since all that Russian capacity has been cut off from the US and, to a lesser extent, from Europe.”
Aboulafia estimates prices for materials and equipment have risen 40 per cent since 2021.
That’s before Trump’s 25 per cent tariffs on steel and aluminium, which are used in planes.
“It’s kind of ironic, raw materials were not a problem, but Donald Trump is determined to make them a problem,” Aboulafia said.
“Tariffs are disastrous”
Inflation in aviation has been accelerating, and “that’s only going to get worse with these tariffs that are being imposed,” agreed John Persinos, editor-in-chief at Aircraft Value News. “These tariffs are disastrous.”
What’s more, the newer generation of planes, such as the Boeing 737 MAX and 787 Dreamliner and the Airbus A321neo, can command premium prices thanks to their lower fuel consumption.
Listed prices a “fiction”
The impact of tariffs is not reflected in the companies’ stale official pricing literature.
Boeing has not updated its figures since 2023, while Airbus’ catalogue is untouched since 2018.
“Catalogue prices were a complete work of fiction,” Aboulafia said. “You got 50 percent off for showing up dressed nicely.”
Airbus decided to abandon the use of catalogue prices “a long time ago” because they “were not closely correlated to the final price, which was based on each specific contract in terms of plane configuration and detail,” the company said.
The aerospace companies will often negotiate additional services such as plane support or training at a discounted level when aircraft are delivered, said the expert who requested anonymity.
Such deals make the official listed price less meaningful, they added.
Contracts for new planes typically include adjustment clauses for inflation, while pricing can also be tweaked if deliveries are delayed.
