Reading in Leeham News and Comment aerospace blog about the appearance of Ray Conner, CEO of Boeing Commercial Airplanes, at JP Morgan aerospace conference I picked the following lines:
Joe Nadol (JN) of JP Morgan: Is there pricing pressure?
Ray Conner (RC): I think margin will be OK [for 737NG]. Some initial launch deals for MAX can be a little more aggressive, but we’re seeing that become more stable.
JN: MAX–I thought pressure would be more on late NGs than on the MAX.
RC: We were a little late getting into the marketplace with MAX and there was pricing pressure on NGs. We were about a year late so we were more aggressive than we would have been had we not been late.
For the last years I have been trying to estimate averages for the discounts Boeing applies to its commercial aircraft using as departing information Boeing year-end financial results, list prices, net orders, deliveries and services revenues. You can see the results for 2012, 2011, 2010 and 2009. In each of the posts you can see a detailed explanation of the methodology I followed.
Why do I comment this? Since 2009 I have noticed that the average discount has gone from ~38% (2009), 39% (2010), 41% (2011) to 45% (2012)!!
Find below the explanation I could find for that hike in the discount:
The explanation I can find for that increase shall be linked the built-in penalties for 787 (net orders for 2012 being -12 a/c) and 747 delays (1 single net order) into revenues plus the launch of a new aircraft, 737 MAX (forced by A320neo sales success in 2011).
How does it compare to Conner’s words?