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RR v. Pratt Suit Exposes Typical Jet Engine Discounts

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The list price for the Trent engine is $20 million, which was discounted an average of 87.3 percent to $2.54 million, the judge said, citing company data. She rejected Rolls-Royce arguments that without competition from East Hartford, Connecticut-based Pratt's GP7200 engine, the discount would have been 77 percent, for a price of $4.6 million, the filing shows. (www.sfgate.com) More...

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chalet
chalet 0
I am astonished to see the incredible discounts granted by manufacturers of jet engines mounted on aircraft 70-80% and even more. What about airframe manufacturers, do they grant also such incredibly deep discounts too. What is the rationale of publishing a number and then take a plunge. Can anyone explain this.
JCCasebeer
John Casebeer 0
The airframe manufacturers give big discounts but I don't know the amounts. No matter what business one is in it is incredible that you can give 80% discounts. If they sell any engines at full retail they will make a lot of money.
z274123
paul paul 0
When the time comes to replace parts, the manufacture will jack the price of the part 70-80%
richardfox
Richard Fox 0
The answer is is the aftermarket - spare parts, repairs and overhauls easily make the business model profitable. OEM sales prices are just high enough to win the business and get the engines in the field.
chalet
chalet 0
The big airlines are very clever, when they buy say 50 or more engines at whatever discount they can get, they also get the supplier to sign long term contracts specifying how much each part is going to cost over say the next 5, 10 or even 15 years adjusted for inflation etc. keeping the supplier on short leash avoiding being overcharged. It is the small airlines that do not have anough bargaining power and thus have a hard time when buying aircraft,engines/spares. Insofar sparte parts Messrs. Pratt & Whitney are now selling GE parts and GE is returning the favor in the same fashion, and there are other third party sources selling spares for all makes -reverse engineering mind you- which benefits the airline industry as a whole. Not bad.
overtime111
You think that's bad you should look at the discounts hospitals give insurance companies verses regular people . The hospitals give insurance companies discounts upwards to 60-80percent because of the volume of business they do while the average person w/o insurance is billed 100 percent.
clanky2
Cormac Clancy 0
A "regular" person never buys a Trent engine, but can easily get sick !
The"list" price of a jet engine is a fiction - I would bet that neither RR nor Pratt ever ever sold an engine at "list" price !
21voyageur
Dan Chiasson 0
It's like razors and blades - give them the razors for free, and the customer will pay the insane prices for the blades - that is where the money is. In the case of aircraft engines, it is even more of a commitment. Once committed to an engine - u have actually committed to the support plan for the duration of the time you have the aircraft. And them parts ain't cheap!

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