UAE not affected by Airbus hikes

Dubai: UAE carriers Emirates and Etihad Airways are not affected by Airbus' decision to increase the average list price of its aircraft by 4.4 per cent, the airlines said yesterday.

The French plane manufacturer said yesterday the increment applies to all new aircraft from the beginning of this month, apart from the A380, for which the increase is 8.4 per cent.

The price adjustment, however, does not apply to deals that were struck prior to January 1, an Airbus spokesperson clarified to Gulf News.

An Emirates spokesperson said: "The price of Emirates' 75 A380 aircraft on order is as per the original purchase contracts and no changes have been made to these as a result of the recent list price increases."

Etihad Airways made history in July 2008 at the Farnborough International Airshow when it placed a firm order for 100 new aircraft including ten Airbus A380s. But a spokesperson for Etihad Airways told Gulf News yesterday they are also unaffected by the price hike.

John Siddharth, Industry Analyst, Aerospace and Defence Practice, South Asia and Middle East at Frost and Sullivan, said: "The weakening of the dollar coupled by the growth in the aviation sector has generated an opportunity for the aircraft manufacturers to increase the listed price of their aircraft.

"Airbus has increased its list price of the A380 by 8.4 per cent; therefore a jumbo aircraft now costs $375.3 million (Dh1.378 billion). Etihad Airways, Emirates and Qatar Airways have all placed A380 orders for their long-haul operations.

"Airbus would have been very cautious on [introducing] price changes to such airline operators. The Middle East is expected to account for nearly eight per cent of total global delivery of new aircraft in the next two decades, which would amount to about 2,300 new aircraft in this region."

Standard escalation

Airbus said the 4.4 per cent increment had been calculated according to its standard escalation formula over the January 2010 to January 2011 period.

John Leahy, Airbus Chief Operating Officer, said: "As we continue to ramp up production to meet the unprecedented global demand for Airbus aircraft, the required industrial investments we are making, coupled with a weak dollar, necessitates raising our aircraft prices across the board.

"Moreover, the A380's further price adjustment reflects the type's exceptional value it clearly generates for its operators, with whom it has exceeded all expectations in service."