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Boeing Ups Base Price of Most of Its Jetliners

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<i> From Associated Press</i>

Boeing Co. said it has raised the base price of most of its commercial jets by 5%, the first increase in 23 years.

The increases are expected to add millions of dollars to Boeing jet prices over the next decade. The first of the higher-priced planes will be delivered in two years, with much of the effect seen in deliveries in subsequent years.

Even with the increases, Boeing’s base prices are expected to remain 2% to 6% below those of Europe’s Airbus Industrie, its chief competitor.

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Both companies adjust their list prices each year for inflation, but the base prices are seldom changed.

Although airlines rarely pay anything close to list prices, the price boost is significant as a sign that Boeing believes its big backlog of orders and continued strong demand justify a stronger negotiating position, analysts said.

“There has been a very strong demand, orders are still coming in and there are very few slots left,” said Paul Nisbet of JSA Research. “It’s about time to make some money off them.”

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Boeing spokeswoman Janice Hayes said the price increase on all models, except the new 717, came after a market analysis and with an eye toward boosting revenue at the struggling manufacturer.

Although the Seattle-based company has had record production rates and a high volume of orders the last two years, it has struggled with parts shortages and other production problems that have cost it more than $2 billion and resulted in a $178-million net loss for 1997, its first in 50 years.

Boeing raised the base price of its most expensive 420-seat 747 to about $176 million, from $167.5 million. The price of the popular 737-800 will be about $54 million, up from $51.5 million.

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