Falling Dollar Makes Airbus Increase Jet Prices

By Emma Vandore, AP Business Writer

posted: 22 April 2008 12:49 p.m. ET

: Because of rising metals prices and the falling dollar, Airbus has raised the 2008 list prices of its widebody jets by $4 million above its yearly 2.47 percent standard annual price escalation. The list price of the A380 is now $327.4 million. Airbus also has raised the prices of its narrowbody jets an extra $2 million. Credit: Airbus S.A.S. 2007 - Photo by exm Company/H. Goussé

PARIS (AP) — European planemaker Airbus said Tuesday it is increasing catalog prices for its aircraft to reflect the low dollar and high metals prices.

As of May 1, Airbus said it is adding an extra US$4 million (euro2.5 million) to the price tag of its superjumbo A380 and wide-body long range jets. The planemaker lists the A380 at $327.4 million (euro205.8 million) and the A350-800XWB at US$208.7 million (euro131.2 million), although airlines often negotiate substantial discounts on the catalog prices.

Airbus is also charging an extra US$2 million (euro1.3 million) for single-aisle aircraft such as the A320, listed at US$76.9 million (euro48.4 million).

The increases come on top of the regular 2.74 percent yearly escalation for 2007.

"We have to keep pace with the world market price developments and secure profitable deals," said John Leahy, Airbus' chief salesman, in a statement.

The 15-nation currency hit its latest record of US$1.5982 last Thursday.

Over the past year, Airbus said the dollar has depreciated more than 15 percent while the prices of aluminum plates, stainless steel and other metal products that it uses to build planes have gone up by at least 6.5 percent.

Titanium, steel, aluminum, and aluminum-lithium account for at least 40 percent of the weight of modern aircraft, Airbus said.

The European planemaker, which sells its planes in dollars while many of its costs are in euros, says each 10-cent rise in the euro against the dollar costs the company euro1 billion ($1.59 billion).

To protect itself, Airbus' parent EADS is remodeling its business to shift more of its costs into dollars.

Its North America unit announced Tuesday it is boosting its defense capabilities in the United States with the acquisition of California emergency response service company PlantCML for around $350 million (euro219.7 million).