Boeing released 2010 results last Wednesday. The company reported revenues in excess of **64bn$**, **462 commercial deliveries and 530 net orders for its commercial aircraft**. All these were widely reported by the media.

Last year I wrote in one post what was my estimation of Boeing discounts. In this post I wanted to update, if necessary, the figure I calculated for the average discount Boeing applies in its commercial aircraft in relation to the published list prices.

Most of the necessary information can be found in its website. Boeing **list prices** can be found here. With these list prices, the updated **average list price per kg is now ~1,750$** (find the post I wrote last year about this).

The number of gross and **net orders** (after cancellations) year by year can be found here. Last year **deliveries** can be found here.

As in the post of last year:

- I needed to make
**one assumption**: new orders come with a**3% down payment**in the year of the booking, while the remaining cost I assumed that was paid on the year of delivery (for simplicity I didn’t consider more intermediate revenue recognition milestones linked to payments, the 3% figure was taken from the AIAA paper “A Hierarchical Aircraft Life Cycle Cost Analysis Model” by William J. Marx et al.). - I also needed to
**estimate**the figure Boeing Commercial Aviation**Services revenues**: the figure I have used is 2.5bn$ [1].

Having put all the figures together, the calculation is immediate. Boeing Commercial Aircraft revenues are the sum of:

- the discounted prices times the delivered aircraft in the year,
- less the down payment of the current year delivered aircraft, as the down payment was included in previous years results,
- plus the down payment of current year net orders,
- plus services revenues.

The discount figure that minimized errors last year was 38%. Using this figure, the error obtained this year in relation to Boeing Commercial Aircraft reported revenues is 2.8%. A little higher discount would reduce the error; the best estimate is now 39% (being the errors in revenues of: 1.3% for 2010, 1.45% for 2009, 1.7% for 2008 and 1.02% for 2007).

Thus, the updated **discount for Boeing commercial aircraft is 39%** (!). The price of Boeing aircraft per kg after the discount is then ~1,070$.

***

*[1] The error in the estimate of the services revenues is negligible when calculating the magnitude of the discounts: an error of 1bn$ up or down in the figure used affects the error in the estimate of the discount in only 3%; or another way to see it: an error of 1bn$ up or down in the figure used for services would impact the discount value in just 2% to obtain the same error, e.g. 36% instead of 38%.*