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Airbus hiking plane prices due to weak dollar, rising metal prices

Airbus hiking plane prices due to weak dollar, rising metal prices

European aircraft manufacturer Airbus will next month raise the catalog list prices of its planes above the standard increase as a consequence of the weak U.S. dollar and high metal prices.

   On top of the 2.74 percent normal escalation for 2007, the May 1 price increase comprises an additional $2 million per single-aisle aircraft and $4 million per widebody long range and A380 Family aircraft.

   'The price increase is mainly triggered by the weak U.S. currency and the overall increase of world market's raw material prices — especially with regards to metal. It is the first time since 2003 that Airbus applies a price increase above escalation,' the EADS company said in a statement.

   Airbus said the euro vs. dollar exchange rate over the last 12 months has moved from 1.35 to almost 1.60, which translates into a devaluation of more than 15 percent. Prices for metal products such as aluminum plates, and stainless steel have gone up by at least 6.5 percent, and costs for industrial products in the euro-area increased by 5 percent in the course of 2007.

   'We have to keep pace with the world market price developments and secure profitable deals,' said John Leahy, Airbus' chief operating officer for customers.

   Airbus has a backlog of more than 3,700 aircraft, relating to six years of production.