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FT: Trade Politics Tipped AI Order To Boeing  
User currently offlineJoni From , joined Dec 1969, posts, RR:
Posted (9 years 2 months 5 days 14 hours ago) and read 3436 times:

According to today's FT, trade balancing pressure applied by the US caused the Indians to place their huge order with Boeing instead of Airbus, as opposed to operational issues publicly quoted.

http://news.ft.com/cms/s/7601915a-bfe8-11d9-b376-00000e2511c8.html

(requires registration beyond the first paragraph)

64 replies: All unread, showing first 25:
 
User currently offlineAvek00 From United States of America, joined Oct 2004, 4336 posts, RR: 19
Reply 1, posted (9 years 2 months 5 days 14 hours ago) and read 3418 times:

Given that AI is a state-owned airline and thus an extension of the Government of India, I see nothing wrong with the GOI using the AI fleet order for diplomatic ends. My beef starts when PRIVATE companies are subjected to government influence or economic support.


Live life to the fullest.
User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7062 posts, RR: 57
Reply 2, posted (9 years 2 months 5 days 14 hours ago) and read 3402 times:

Quoting Avek00 (Reply 1):
I see nothing wrong with the GOI using the AI fleet order for diplomatic ends. M

Except if it went the other way! lol.



The world is really getting smaller these days
User currently offlineAvek00 From United States of America, joined Oct 2004, 4336 posts, RR: 19
Reply 3, posted (9 years 2 months 5 days 14 hours ago) and read 3376 times:

Quoting BestWestern (Reply 2):
Except if it went the other way! lol.

Not at all - the GOI is free to use AI/IC's fleet acquisitions to further any ends it desires.



Live life to the fullest.
User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7062 posts, RR: 57
Reply 4, posted (9 years 2 months 5 days 14 hours ago) and read 3350 times:

As an FT subscriber, its a pretty damming article actually - to briefly quote from it (to stay in the copyright rules).

"The problem is not that we are being protectionist but that US industry is uncompetitive," the official said.

Later...

"We would want to buy US defence equipment but there is a longstanding feeling that the US is not a reliable supplier because of the history of sanctions. This means that the one thing we can buy from them is aircraft. Ultimately there was a political difference between the two offers."


Pretty sad that the government selects the aircraft for political terms and not actual utilisation terms.



The world is really getting smaller these days
User currently offlineSebolino From France, joined May 2001, 3681 posts, RR: 4
Reply 5, posted (9 years 2 months 5 days 14 hours ago) and read 3328 times:

Quoting BestWestern (Reply 4):
Pretty sad that the government selects the aircraft for political terms and not actual utilisation terms.

I'm shocked. NAV20 said it was because Boeing planes were far ahead of Airbus ones. I can't believe he lied.  Smile


User currently offlineJasepl From India, joined Jul 2004, 3582 posts, RR: 40
Reply 6, posted (9 years 2 months 5 days 14 hours ago) and read 3317 times:

Ha! I posted this in another thread a few days ago:

As all of us in India are all too aware, most 'deals' involving our government have a questionable element to them. Most of them would make even the most seasoned Vegas gambler blush, so stacked is the deck.

We have no reason to expect otherwise this time around.


User currently offlineKL911 From Ireland, joined Jul 2003, 5113 posts, RR: 12
Reply 7, posted (9 years 2 months 5 days 14 hours ago) and read 3304 times:

'The Boeing Dirty Tricks Campaign'

Hope Airbus wins this one in court, like VS did against the 'government owned' BA dirty tricks in the 80's. ( or 90's, forgot which one...)

KL911



Next trip : DUB-AUH-CGK-DPS-KUL-AUH-CDG-ORK :-)
User currently offlineJaysit From , joined Dec 1969, posts, RR:
Reply 8, posted (9 years 2 months 5 days 14 hours ago) and read 3289 times:

So what if the Govt of India decided to include national policy priorities into this mega-purchase. $ 6.5 billion isn't chump change, and whoever offers the best deal wins the prize. A cozier relationship with the US apparently trumps one with the Euros at this juncture in Indian history. So be it. Airbus did win a 43 narrowbody order. That should keep them happy. Both aircraft manufacturers aren't babes in the woods to be unaware of geo-political realities.

Its not like AI ordered Il-96s for its fleet expansion. The 777/787 family is an excellent decision.


User currently offlineDaedaeg From United States of America, joined Feb 2003, 656 posts, RR: 1
Reply 9, posted (9 years 2 months 5 days 14 hours ago) and read 3276 times:

At this point it's all speculation. The report is citing an anonymous Indian government official. We don't know how credible this supposed official is. This official could be disgruntled or bias and using this an opportunity to vent his frustrations. But if this all turns out to be true, it's too bad that the Indian government does not have the political fortitude to make decisions based on what's best for the airline. But as been said, the 787/777 is still a great selection for AI.

[Edited 2005-05-09 17:19:43]


Everyday you're alive is a good day.
User currently offlineJasepl From India, joined Jul 2004, 3582 posts, RR: 40
Reply 10, posted (9 years 2 months 5 days 14 hours ago) and read 3256 times:

Quoting Daedaeg (Reply 9):
At this point it's all speculation. The report is citing an anonymous Indian government official. We don't know how credible this supposed official is. This official could be disgruntled or bias and using this an opportunity to vent his frustrations.

I concur. However, thos of us who know India, know that that's how things work here. Chances are that there was "foul" play involved, on the part of the Government, Boeing and Airbus. Only it's not really "foul" here; it's simply par for the course.


User currently offlineEha From France, joined May 2005, 211 posts, RR: 0
Reply 11, posted (9 years 2 months 5 days 13 hours ago) and read 3228 times:

Quoting Avek00 (Reply 1):
My beef starts when PRIVATE companies are subjected to government influence or economic support.

So you are extremely pissed off when a company like Boeing receives US government support to get orders  Smile

Remember the El Al deal ? all these A340s which suddenly became 777 ?

E.


User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 12, posted (9 years 2 months 5 days 13 hours ago) and read 3214 times:

The FT is a respectable source. While I do not have access to the article, I do not doubt the veracity of what they write.

However I do hope that they research further back then this year and also write about how the French government were tying defense contracts to purchases of A340s several years ago. The Economist an article wrote several years ago detailing the shady circumstances (bribery) under which Indian Airlines bought the A320 in first place many years ago. The French government was not complaining about impropriety or unfairness back then.

Since the French Foreign Ministry acts a defacto sales agent for Airbus with officials departing on official business flatly stating they are out to sell Airbus equipment, I think the US simply outflanked the French and the French cannot deal with it. I think that would be a better, more thorough characterization of what occurred in this deal.

Considering that Airbus tried to force ANA (a private firm) to change its selection from Boeing to Airbus by having Mario Monti complain directly to the Japanese PM, the French complaints in this matter ring hollow but are unsurprising.


User currently offlineEha From France, joined May 2005, 211 posts, RR: 0
Reply 13, posted (9 years 2 months 5 days 13 hours ago) and read 3182 times:

Quoting N79969 (Reply 12):

Considering that Airbus tried to force ANA (a private firm) to change its selection from Boeing to Airbus by having Mario Monti complain directly to the Japanese PM, the French complaints in this matter ring hollow but are unsurprising.

So what ? As I said before, Boeing fought back at times when they lost Indian Airlines orders and history is full of defeat badly accepted, whether it is Airbus or Boeing the loser...And it would be naive to think that their respective govt let them alone and do not try to put pressure on airlines/govt to reconsider cases from time to time...

Remember Thai wanted A340-500 only if UE would accept to import more shrimps from Thailand...So you can be open...Anything can happen to force/agree upon an A/C sale (but it is true for other things...)

E.


User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 14, posted (9 years 2 months 5 days 13 hours ago) and read 3184 times:

Eha,

El Al is the state-owned carrier of Israel. It is not private. I believe El Al wanted A330 and not 340.


User currently offlineAvek00 From United States of America, joined Oct 2004, 4336 posts, RR: 19
Reply 15, posted (9 years 2 months 5 days 13 hours ago) and read 3175 times:

Quoting Eha (Reply 11):
So you are extremely pissed off when a company like Boeing receives US government support to get orders

A better example would be if Boeing got subsidies (direct economic support) to build aircraft.  Smile



Live life to the fullest.
User currently offlineMrNiji From , joined Dec 1969, posts, RR:
Reply 16, posted (9 years 2 months 5 days 13 hours ago) and read 3164 times:

Thread number 8174382173981274897431298742198 on the AI deal, and that dirty politics etc...

Quoting KL911 (Reply 7):
Hope Airbus wins this one in court

Hope Airbus looses in court and hope that the planes come finally, in the interest of India - I care a f--- whose planes, but NO DELAY PLEASE!!!!!.. this whining in Europe pisses me off.. if the GOI decides to involve politics: LET THEM.. IT IS A SOVEREIGN COUNTY.. accept it or don't it is up to you - we can decide ourselves, and there is no legal basis to sue the GOI: WTO criteria not relevant, and Airbus is no legal Indian person, so Indian law does not count, as they can't start a process.. but please stop whining and stop with these stupid statements (tons of you on anet, KL911)


User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 17, posted (9 years 2 months 5 days 13 hours ago) and read 3143 times:

Quoting Eha (Reply 13):
So what ? As I said before, Boeing fought back at times when they lost Indian Airlines orders and history is full of defeat badly accepted,

Not really. The only instance I recall Boeing acting like a real bad loser is after it lost the Iberia deal to the A340-600. And that was after Iberia blatantly gamed them to save a few bucks on Airbus. There is no parallel to the hysterics of the Airbus and the French.


User currently offlineJasepl From India, joined Jul 2004, 3582 posts, RR: 40
Reply 18, posted (9 years 2 months 5 days 13 hours ago) and read 3139 times:

Quoting N79969 (Reply 14):
El Al is the state-owned carrier of Israel. It is not private. I believe El Al wanted A330 and not 340.

El Al were privatised some time ago. After the Israeli government sold them, there was talk that El Al might buy Airbus - as originally intended. I remember the furore that caused here on ANet!


User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 19, posted (9 years 2 months 5 days 13 hours ago) and read 3110 times:

Quoting Jasepl (Reply 18):
El Al were privatised some time ago. After the Israeli government sold them, there was talk that El Al might buy Airbus - as originally intended. I remember the furore that caused here on ANet!

Yes I do realize that and forgot to say "was". El Al was the state owned carrier of Israel when the US told them not to send part of the billions they receive from US taxpayers to France.


User currently offlineEha From France, joined May 2005, 211 posts, RR: 0
Reply 20, posted (9 years 2 months 5 days 13 hours ago) and read 3110 times:

Quoting Avek00 (Reply 15):
A better example would be if Boeing got subsidies (direct economic support) to build aircraft.

One for sure would say they receive direct economic support to build military A/C but that not the point...The loan thing you seem to mention is covered by a bilateral agreement signed in 92 (UE/US) which specifies the amount of loan allowed from the UE to Airbus for the development of a new program (capped to 1/ of the total dev costs),and also specify all what Boeing can benefits from (NASA program etc...)....This damn thing has been signed by both parties...

Back to the subject, I took your statement the other way around : A governement supporting its private industry : ex: the US govt and Boeing (therefore the El Al example).

Quoting N79969 (Reply 14):
El Al is the state-owned carrier of Israel. It is not private. I believe El Al wanted A330 and not 340.

Answered above. You're right Airbus pitched A330-300 and A340-300 to El Al while Boeing the 767-400ER and 777-200LR...Airbus got the deal done or so it seems for 3 A330, but then Allbright came into play...

That's fair, given the fact that they would pay with US subsidie (not loan...) Smile).

E.


User currently offlineShawnnyc From United States of America, joined Mar 2005, 241 posts, RR: 0
Reply 21, posted (9 years 2 months 5 days 13 hours ago) and read 3099 times:

I think it is amazing that so much is being made of this AI order. Airbus has stopped at nothing in proving that the selection was not on "merit". They did after all win the IA order, so they shouldn't feel this snubbed (they are acting like the overall competitiveness of their product line is being undermined by this order). Its getting to the point that I think Indians have a right at being annoyed. Indians democratically elected this government, if they feel they are corrupt, they will throw them out.

In the end the decision between A & B was probably pretty close (if not slanted to B because of the new market environment in India post economic boom and market liberalization). The political climate just sealed it in favor of Boeing. I say kudos to India for finally behaving like every other country in the world by putting their interests first. If America can give India outsourcing jobs, technology transfers, immigration/work visas, etc, giving America the Boeing order is a no brainer when there would be no/minimum negatives to AI.

Finally I do not feel it was because of corruption that AI chose not to buy into the A380 philosophy. It doesn't look like any Indian carrier will go for the A380 for some time. They will all concentrate on flying internationally from several Indian points, with no mega hub, as well as non-stops to the US/Canada. For that strategy, I think it is hard to say that AI will suffer with the likes of the 777LR.


User currently offlineMrniji From , joined Dec 1969, posts, RR:
Reply 22, posted (9 years 2 months 5 days 13 hours ago) and read 3069 times:

Quoting Shawnnyc (Reply 21):
Finally I do not feel it was because of corruption that AI chose not to buy into the A380 philosophy.

Exactly, but these Europeans will argue throughout: "Look, they didn't choose our baby, the A380, so they are underdeveloped, dumb, corrupt etc.." - they do not realize that the 380 does not suit the RFP (Request for Prposals) . i.e., in other words, and in all utter clearness:

A I R - I N D I A DID NOT ASK FOR SUCH A PLANE AS THE A380.. AND IF THEY DUN WANNA, IT IS THEIR RIGHT!!! WHY FORCE AI IF THEY HAVE A STRATEGY FOR MCLR AND ULR, AND THEN ARGUE: THESE CORRUPT INDIANS! - my goodness


User currently offlineLemurs From United States of America, joined Mar 2005, 1439 posts, RR: 4
Reply 23, posted (9 years 2 months 5 days 13 hours ago) and read 3025 times:

One thing that people need to differentiate between is corruption and international trade relations. AI and India choosing Boeing over Airbus because of favorable trade relations is an obvious boon to both economies. Even if everything was equal between the planes, that would tip the balance in Boeing's favor, and THERE IS NOTHING WRONG WITH THAT.

It becomes corruption when individuals acting outside the interests of the state take money to move the decision in a direction that is not beneficial for anyone but themselves. Unless they can prove that, the fact that trade factored into the purchase is a non-issue.



There are 10 kinds of people in the world; those who understand binary, and those that don't.
User currently offlineMrniji From , joined Dec 1969, posts, RR:
Reply 24, posted (9 years 2 months 5 days 12 hours ago) and read 3006 times:

Quoting Lemurs (Reply 23):
One thing that people need to differentiate between is corruption and international trade relations.

Agreed! Even if Airbus had the cheaper offer.. maybe the deal with the US/Boeing is better for the whole Indian economy per se, rather than with Airbus/Europe.. so many, many other factors other than operational are involved, which could make the B order more favorable.. in terms ofpolitical economy: of course India has to go with the US, as Europe's performance on the World Market is gradually declining  Yeah sure


25 Jaysit : El Al was the state owned carrier of Israel when the US told them not to send part of the billions they receive from US taxpayers to France. And the U
26 Leskova : Why do I, when reading through this (and the other threads), get the impression that this subject needs a bit of a cooling-off-period... First of all,
27 Lemurs : Excellent post, but I disagree with this last point. As you point out, both sides are intimately familiar with this kind of politicing, as both the v
28 Joni : I don't think anyone has claimed that Airbus would have offered the A380 here, so this is an egregious strawman argument.
29 N79969 : Like I say above, without having read the article I defer to the FT as I consider it respectable and accurate publication. Even conceding that this de
30 Post contains links BestWestern : Todays FT main editorial slams the Indian government - to quote just a small part of the editorial: http://news.ft.com/cms/s/00e6666a-c0f2-11d9-a3da-0
31 Post contains images MrComet : It is naive to look at this order as stolen from Airbus. Airbus and Boeing use the same techniques and Airbus even invented some new ones. However, yo
32 WGW2707 : Contrary to the belief of some in this thread, the foreign business activities of US companies are restricted by the Foreign Corrupt Practices Act, a
33 Shawnnyc : Whoa, the FT editorial is out of line. Is India still a European colony, I think not. The editorial asks India not to be political, but then asks it
34 Travelin man : The FT may be respectable, but I disagree with this paragraph of their editorial. As someone who analyzes proposals and selects vendors, I can honest
35 Mrniji : I fully agree, brilliant analysis, very well-elaborated.. I used to say similiar stuff in other threads, and 95 % of a,netter come and say: "Gosh, ar
36 Dynkrisolo : I wonder why the same author didn't challenge Air Canada's decision? Air Canada included the 350 and didn't use the 9-abreast configuration. The final
37 Joni : FT didn't imply that Boeing had bribed the Indians (or Canadians), but that the US government applied pressure for the Indians to place their entire
38 Post contains images Mrniji : I think it is very difficult to estimate the technical performance of two planes that have never taken off.. you can always compare rae technical dat
39 Jeffrito : Fair orders would be won on the basis of economic performance, not technical performance.
40 Ruscoe : I don't think any of the Europeans here can have any idea how much long term damage they are doing to their own cause. Indians won't take kindly to th
41 Mariner : That is so patronizing, both to Indians and to Europeans. When did it become "paternalism" to say what you believe is the truth? If Airbus, or the Fi
42 Ruscoe : Needless to say Mainer I disagree with you and from the reaction of some very important Indians they do to. Try reading a few Indian articles about it
43 Mariner : You think I have not? But just because something is unpopular does not mean it should not be said. mariner
44 TGV : You may have a problem with France and the French, but let me indicate a quite well known fact: EADS and Airbus are NOT French. France does not even
45 Dynkrisolo : Even if that's the case, the European governments have done their share of pressuring foreign airlines to buy Airbus products. Why do you think THY w
46 BoeingBus : From the wires... Air India Takes `Strong Exception' to Airbus Charges May 11, 2005 09:09 EDT -- Air India Ltd. said it has taken ``strong exception''
47 Jasepl : ROTFLMFAO! That was effing hilarious! European colonialism is long gone and people have moved on. You might want to do the same!
48 Ushermittwoch : Ever looked at their medium- and longhaul fleet?
49 Rmenon : Anybody who thinks the FT is living in a colonialist past either does not read very much or has forgotten when FT slammed Airbus for winning the IC A3
50 PHXinterrupted : Were you involved in the decision process? You should keep your stupid comments to yourself.
51 N79969 : TGV, My choice of words was actually deliberate. Airbus maybe "European" on paper but it is French in spirit. No other country in Europe is as intertw
52 Dynkrisolo : I'm fully aware of what they have. It is well known that the French government used the card of whether to vote Turkey into EU, and pressured THY to
53 USAF336TFS : Agreed PHX... KL911, I wouldn't hold my breathe on this one...
54 Shawnnyc : I think it is more about the general condescending attitude where the FT is telling India what to do. It seems that the FT has a problem with the US
55 Post contains links Jakob77 : a new article from Reuters about AI today http://yahoo.reuters.com/financeQuot...05-05-11_17-38-53_bom112570_newsml AI Chairman V. Thulasidas was quot
56 Post contains links and images TGV : N79969, Thanks for explaining your point. I agree with you about the fact that the French government should not intervene as it does in the nomination
57 Schipholjfk : Listen all you Airbus fans and Airbus itself... let it rest! There are 200 other countries you can sell your planes to... they are all fair play. Figh
58 Post contains links AeroPiggot :
59 Post contains links N60659 : On this thread: SQ Cancels A340-500 Options (by Mham001 May 11 2005 in Civil Aviation) there was a reference to this article from a few years ago when
60 Rmenon : Did you actually READ the (full) editorial? Did you see the section where FT points out what happened to Japan getting ever-increasing pressure from
61 Post contains images Mrniji : Get rale, Jason! Colonialism has not been shut in one go on 15 August 47.. there are many other forms of neo-colonilism Strategy.. AI????? No idea wh
62 Post contains images Shawnnyc : You know their "strategy": 1) to have several Indian international gateways while simultaneously building their "hub" in BOM that will offer limited
63 Joni : I suppose you missed the part where I specifically wrote that FT didn't imply anything of the sort (and I didn't either). What I said was that if bri
64 Dynkrisolo : No, I didn't miss that. But you are not FT, right? What they said had nothing to do with what you said. The way you said it clearly implied bribery.
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