Boeing hikes jet prices, drops short-range Dreamliner variant

Boeing Co has announced the first hike in prices of aircraft in two years, raising them by about 5.2 per cent. It has also decided to drop the short-haul 787-3 version of the 787 Dreamliner. The company has held high cost of wages, goods and services as the reasons responsible for the price hike.

Boeing last increased prices in 2008, when it increased costs an average 2.6 per. This increase had come on the back of an earlier increase in 2007 when prices had gone up 5.6 per cent.

The great unknown in aircraft pricing are discounts, which manufacturers routinely give out to airlines. Depending on the size of an order, or the standing of the customer with the manufacturer, discounts can be very deep. According to industry observers, such price hikes may all even out over a period of time.

Boeing and arch-rival Airbus are boosting production levels to record highs as they try and reduce a seven-year backlog of orders from carriers. Increasingly, airline's are expanding fleet size and replacing older model aircraft with more fuel-efficient jets.

There has been a dramatic turnaround in demand after the global recession that almost brought the aviation industry to its knees.

According to Boeing prices, as listed on its website, the average price for the smallest Boeing jet, the single- aisle 737, is now about $71.4 million, which is up from about $69.3 million. The 777's list price is up at $258.2 million from $246 million, while the two 787 models on offer now average $201.7 million, up from $183.3 million.