Business

Boeing Boosts Airliner Prices as Costs Rise

By Jessica Mintz, AP Business Writer

posted: 25 June 2007 05:47 pm ET

: The list price of a new Boeing 737 has risen to $50 million-$85 million depending on the model. As the second-smallest 737 variant, the basic Boeing 737-700 is among the cheaper 737 models. Boeing announced an order for seven 737-700s from Air France-KLM Group at the Paris Air Show, with the aircraft to be operated by the Dutch carrier KLM. At the same time KLM converted existing orders for three larger 737-800s to 737-700s. Credit: Boeing Photo

SEATTLE (AP) -- Boeing Co. has lifted list prices about 5.5 percent for all of its airplanes, including the 787 Dreamliner set to debut next month, to keep up with the costs of labor and materials.

The price increase is "generally consistent with the inflation rate for manufactured goods," according to Jim Condelles, a Boeing spokesman. He said rising labor costs were a bigger factor in the price hike than the cost of raw materials, though both played a part in the company's calculations.

Condelles said the company generally raises list prices each year to keep up with costs.

As of last Thursday, a new 787 could cost anywhere from $146 million (euro108.5 million) to $200 million, about 6 percent higher than 2006 list prices, which ranged from $138 million to $188 million, depending on the model.

Prices for Boeing 737s, which have racked up more than 7,000 orders over more than 40 years on the market, jumped to $50 million to $85 million from a range of $47 million to $80.5 million in 2006.

Boeing's list prices, based on different configurations for each type of aircraft, are considered the starting point for negotiations with airlines.

The aircraft maker is on track to roll out its first 787 by July 8. Test flights are slated to begin around the end of August, and the company is set to deliver the first plane for commercial service to All Nippon Airways Co. next May. Boeing has taken 584 orders for the 787.