As global trade tariffs continue to affect the aerospace industry, the prices of commercial planes from Boeing and Airbus are expected to rise even higher. This increase comes after years of rising costs due to supply chain disruptions caused by the pandemic. According to an aviation expert, “Compared with 2018, prices for commercial jets have risen by around 30 percent.”
The primary cost drivers include inflation in key materials such as titanium, components, and energy, as well as higher labor expenses. Boeing, for example, reached an agreement late last year with its Seattle machinist union to raise wages by 38% over four years to resolve a labor strike. Additionally, Spirit AeroSystems, a major supplier to both aerospace giants, also agreed to similar wage hikes.
Richard Aboulafia, managing director at AeroDynamic Advisory, pointed out that materials like castings, forgings, and titanium have seen particularly high price inflation, largely due to a loss of Russian production capacity. “Items have inflated at a particularly high rate, especially since all that Russian capacity has been cut off from the US and, to a lesser extent, from Europe,” he said.
Aboulafia further stated that raw materials’ prices have risen by approximately 40% since 2021. The imposition of a 25% tariff on steel and aluminum by former President Trump has only worsened the situation. “It’s kind of ironic, raw materials were not a problem, but Donald Trump is determined to make them a problem,” he remarked.
Experts agree that inflation in aviation will only worsen with these new tariffs. John Persinos, editor-in-chief of Aircraft Value News, termed the tariffs “disastrous,” adding that they would exacerbate existing price pressures.
Newer-generation planes, such as the Boeing 737 MAX and Airbus A321neo, are commanding higher prices due to their fuel efficiency. However, the official list prices from both manufacturers are outdated, with Boeing last updating its figures in 2023 and Airbus in 2018. Aboulafia described these catalogue prices as “a complete work of fiction,” noting that discounts of up to 50% are often negotiated.
Airbus stopped using catalogue prices long ago, citing a lack of correlation with final contract prices. Both companies often negotiate additional services, such as training or aircraft support, at discounted rates when the planes are delivered.
New aircraft contracts usually include clauses to adjust prices for inflation, and the pricing is flexible depending on delays or changes in exchange rates. Boeing, while not disclosing details of its pricing structure, emphasized that production costs and market factors are taken into account.
Despite a strong order backlog that will keep Boeing and Airbus busy through the decade, competition between the two remains intense, limiting pricing power. Manfred Hader of Roland Berger consulting noted that before the pandemic, both companies were competing in a market where prices were potentially too low. However, the post-lockdown recovery has seen higher prices as airlines can afford to invest in more expensive aircraft, benefiting from increased demand and profitability.
In February, Japan’s ANA ordered 77 planes, with the updated catalogue prices reflecting higher costs compared to earlier levels. The price of the Boeing 787 Dreamliner increased from $292 million in 2023 to around $386 million, and the Airbus A321neo rose from $129.5 million to $148 million since the 2018 catalogue.
*
Email *
Website
