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Air-India Buys Its Way Into Losses  
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59
Posted (9 years 7 months 2 weeks 3 days 18 hours ago) and read 3624 times:

Another interesting point to me was the difference in which the carriers pay for the 777's vs the A380's (there, I said it....A380, A380, A380).....I would have figured the A380 would be more expensive to purchase (i'm going by the $150-$160 million carriers have been paying for the A380..of course, I assume that launch customers of the 777 got some good deals, but regardless)....

"While it is difficult to compare aircraft purchases of one airline with those of another, even if it is the same product, because of strict confidentiality treaties, media reports indicate that the UAE’s Etihad Airways is buying five Boeing 777-300ERs for $1.09 billion, or about $218 million a plane.

Air-India’s internal notes reveal the asking price for the 15 B777-300ERs was $4.273 billion, or $284 million apiece. That is a difference of $66 million on each aircraft. "


----------

"Air-India buys its way into losses
JAYANTA ROY CHOWDHURY
New Delhi, May 12: Even before the dust settles over the controversy surrounding the recent aircraft purchases by the two state-run airlines, there’s another brewing.

It now transpires Air-India will stand to lose money hand over fist during the entire lifespan of the 50 Boeings it is slated to buy.

Rival Airbus won’t be able to cry foul because internal assessments made by the negotiating committee show Air-India would have lost more if it had bought Airbus planes. Airbus has alleged extra-commercial considerations in Air-India’s decision to buy Boeings.

Confidential minutes of the committee show that over a lifespan of 17 years, the three Boeing models being purchased at a cost of $6.9 billion will lead to a combined loss of Rs 15,851 crore.

If Air-India is unable to subsidise operations of these three kinds of planes from operations of its newly started low-cost carrier — Air India Express — losses in flying these planes are likely to mount to Rs 23,378 crore. "

rest of the article can be found at..


http://www.telegraphindia.com/1050513/asp/frontpage/story_4733856.asp


"Up the Irons!"
28 replies: All unread, showing first 25:
 
User currently offlineJwenting From Netherlands, joined Apr 2001, 10213 posts, RR: 18
Reply 1, posted (9 years 7 months 2 weeks 3 days 13 hours ago) and read 3482 times:

And another one with no clue about economics...


I wish I were flying
User currently offlineMrniji From , joined Dec 1969, posts, RR:
Reply 2, posted (9 years 7 months 2 weeks 3 days 13 hours ago) and read 3476 times:

Quoting Jwenting (Reply 1):
And another one with no clue about economics...

Even I was surprised, as B and A would have doene the very, very best to secure this offer, as it makes future business more likely..

the problem with these analysis is that numbers are used randomly and incompletely, without seeing the context and without telling the full truth (what does the package comprise, what are the specs etc..) - moreover, a comprehensive forcast as the author did are not possible due to the market dynamics and many other factors involved


User currently offlineHAWK21M From India, joined Jan 2001, 31712 posts, RR: 56
Reply 3, posted (9 years 7 months 2 weeks 3 days 12 hours ago) and read 3427 times:

Unless all required data is available.Difficult to comment.
regds
MEL



Think of the brighter side!
User currently offlineJaysit From , joined Dec 1969, posts, RR:
Reply 4, posted (9 years 7 months 2 weeks 3 days 9 hours ago) and read 3340 times:

In the end it doesn't matter.

Air India will keep leasing rickety A310s as these rickety MPs and politicians keep making a noise. The prices of aircraft will keep going up for India's statist useless carriers because the aircraft manufacturers know fully well that other airlines are lining up for airplanes and that AI and IC cannot be trusted to adhere to a contract.

At least Jet Airways will thrive. One can hope. Although the dog in the manger attitude of India's venal and stupid politicians will ensure that they keep nipping at Jet's heels.

And of course, Emirates will keep thriving. I wonder if any of these MPs are on Emirates payroll.


User currently offlineDIJKKIJK From France, joined Jul 2003, 1822 posts, RR: 4
Reply 5, posted (9 years 7 months 2 weeks 3 days 8 hours ago) and read 3283 times:

Quoting Jaysit (Reply 4):
And of course, Emirates will keep thriving. I wonder if any of these MPs are on Emirates payroll.

It does look like they are buying A380s solely for the Indian market. Why else would a pinch of a country like UAE need A380s?



Never argue with idiots. They will bring you down to their level, and beat you with experience.
User currently offlineKaran69 From India, joined Oct 2004, 2893 posts, RR: 18
Reply 6, posted (9 years 7 months 2 weeks 3 days 6 hours ago) and read 3171 times:

Bussiness
Politics
Poor Negotiation Skills


Take your pick


User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59
Reply 7, posted (9 years 7 months 2 weeks 3 days 5 hours ago) and read 3108 times:

Quoting Karan69 (Reply 6):
Bussiness
Politics
Poor Negotiation Skills


Take your pick

as long as they pick those Boeings up...I sure can care less...  biggrin 



"Up the Irons!"
User currently offlineLH477 From Canada, joined Jan 2004, 584 posts, RR: 5
Reply 8, posted (9 years 7 months 2 weeks 3 days 5 hours ago) and read 3090 times:

privatize......Likely not happen too soon....Laloo and Co. need their nice expensive toys...


Come on you gunners......!!!!!
User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 9, posted (9 years 7 months 2 weeks 3 days 4 hours ago) and read 3035 times:

If it was decided for AI it had to be Boeing, Boeing would be foulish to give any discounts..

User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 37
Reply 10, posted (9 years 7 months 2 weeks 3 days 3 hours ago) and read 2972 times:

Quoting Keesje (Reply 9):
If it was decided for AI it had to be Boeing, Boeing would be foulish to give any discounts..

Except if you read the article, you will see that they indicate that the Airbus offer for AI would have result in a larger loss, which calls into question Airbus's claims that the Boeing deal wasn't based on economics.



ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offlineHawaijahaz From United States of America, joined Oct 2004, 352 posts, RR: 0
Reply 11, posted (9 years 7 months 2 weeks 3 days 3 hours ago) and read 2957 times:

That doesn't seem right.

Quoting Mrniji (Reply 2):
Even I was surprised, as B and A would have doene the very, very best to secure this offer, as it makes future business more likely..

I would definately agree with this. Considering that both A and B are saying that Indian aviation will grow by crazy amounts every year, they would want to have their aircrafts be in the positive light for the first set of orders.

But if it's true, it sucks. What's the point of buying aircrafts if it will not make you money over it's useful life. I say stick with the A310s.

PG


User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 12, posted (9 years 7 months 2 weeks 3 days 2 hours ago) and read 2934 times:

Quoting Atmx2000 (Reply 10):
which calls into question Airbus's claims that the Boeing deal wasn't based on economics

No, it was an Indian government official in the Financial Times.


User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 37
Reply 13, posted (9 years 7 months 2 weeks 3 days 2 hours ago) and read 2910 times:

Quoting Keesje (Reply 12):
No, it was an Indian government official in the Financial Times.

An anonymous government official whose agenda we don't know. In this article a non-anonymous MP who is interested in cost control has revealed (or one of his assosciates has revealed) negotiating committee analysis of the operating economics of both Boeing and Airbus offers, which indicates the latter's offer was not superior in the end.

Rival Airbus won’t be able to cry foul because internal assessments made by the negotiating committee show Air-India would have lost more if it had bought Airbus planes. Airbus has alleged extra-commercial considerations in Air-India’s decision to buy Boeings.



ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offlineJaysit From , joined Dec 1969, posts, RR:
Reply 14, posted (9 years 7 months 2 weeks 3 days 2 hours ago) and read 2884 times:

This whole article is bunk.

Although the GOI is generally packed with morons, Praful Patel and Air India's current management staff certainly know how to negotiate. And given the intense competition between Airbus and Boeing, price had to pay a crucial role. Admittedly $ 284 million for a 777-300ER is high (SQ paid $ 220 million all inc.), but there is something amiss in this article.


User currently offlinePlaneSmart From New Zealand, joined Dec 2004, 1101 posts, RR: 0
Reply 15, posted (9 years 7 months 2 weeks 3 days 1 hour ago) and read 2851 times:

At one end of the negotiating skill league table you have Singapore, Virgin and Emirates.

At the other you have airlines with little bargaining power. Small size, small $'s, high risk.

On paper, Air India have top negotiators & should be in the top 25%. But to do a good job, they have to be given a mandate, be permitted and trusted to get on with it, have no external interference.......

Where do you think they rank?


User currently offlineBandA From United States of America, joined Aug 2004, 341 posts, RR: 0
Reply 16, posted (9 years 7 months 2 weeks 3 days 1 hour ago) and read 2820 times:

Sorry if I am sounding like a namak-haraam

What I can't understand is How the hell despite all these problems - AI has been running this long????


Is it tax money? Surprising to see someone actually pays taxes in India! and even more surprising the these tax monies actually reach that far!!!



"They [Terrorists] never stop thinking about new ways to harm our country and our people, and neither do we." - GWB
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59
Reply 17, posted (9 years 7 months 2 weeks 2 days 20 hours ago) and read 2753 times:

Quoting BandA (Reply 16):
Sorry if I am sounding like a namak-haraam

 rotfl 

abbay bahiyah, you should know how desi-mentality works, I wouldn't be surprised if PK is also operating at a loss (I think they are), yet they are getting a plethora of 777's, to which I'm not complaing one bit!!



"Up the Irons!"
User currently offlineMrniji From , joined Dec 1969, posts, RR:
Reply 18, posted (9 years 7 months 2 weeks 2 days 18 hours ago) and read 2692 times:

Quoting Jacobin777 (Reply 17):
abbay bahiyah, you should know how desi-mentality works, I wouldn't be surprised if PK is also operating at a loss (I think they are), yet they are getting a plethora of 777's, to which I'm not complaing one bit!!

LOL, Jacobin! The desi way is different, I agree.. just out of curiosity: do you know whether the PK 777 were part of the development deal of the US towads PAK (like the F16s)? And I do agree with you: don't compain about 777s  Wink


User currently offline777ER From New Zealand, joined Dec 2003, 12341 posts, RR: 18
Reply 19, posted (9 years 7 months 2 weeks 2 days 18 hours ago) and read 2687 times:
AIRLINERS.NET CREW
FORUM MODERATOR

Quoting Jacobin777 (Thread starter):

Sounds like Boeing was a wise choice considering an Airbus purchase would have been worse


User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59
Reply 20, posted (9 years 7 months 2 weeks 2 days 17 hours ago) and read 2673 times:

Quoting Mrniji (Reply 18):
. just out of curiosity: do you know whether the PK 777 were part of the development deal of the US towads PAK (like the F16s)?

PK's and KL's 777's are two of the nicest looking 777's in the world (I'm sure many will disagree, but thats JMHO)

Mrniji, if you think AI's policies are arcane, PK's business policies are shrouded in mystery.........

that being said, PK's Chairman, Tariq Kirmani, is a person who comes with a "clean shirt" (i.e. clean record)...

I dont' know if the 777's were part of the develpment deal, but..

1) PK has had a 40 year history with Boeing, going back to the 707's
2) I'm sure there was probably some politics involved
3)
http://www.brecorder.com/index.php?i...No=1&query=&search=&term=&supDate=

"Pakistan to start making Boeing parts next month
ISLAMABAD (May 10 2005): Pakistan would start manufacturing parts of Boeing aircraft from June this year, thus, formally joining the club of aviation parts manufacturers. During a visit of media persons to Pakistan Aeronautical Complex (PAC), Kamra, on Monday, it was stated by PAC chief Air Marshal Aurangzeb that Boeing aircraft Co, have set up parts manufacturing unit at the PAC. "At this factory through Boeing offset programme, we shall be manufacturing aviation parts for Boeing 747, 767 and 777 aircraft," Air Marshal Aurangzeb said. He said know-how thus gained through this venture will certainly help in establishing JF-17 (Thunder) aircraft production line.

"Around 20 parts of Boeing aircraft would be manufactured here for the Boeing company, which has set up parts manufacturing plant as part of the agreement for supply of 777 aircraft to Pakistan International Airlines," another PAC senior officer said during the visit to the under-installation plant unit.

He said parts of Boeing would be manufactured here and sent to the company for their onward sale and supply.

Technicians of Boeing are working on the installation of the plant which would be completed by the end of this month and would start production from next month, he added."



"Up the Irons!"
User currently offlineMrniji From , joined Dec 1969, posts, RR:
Reply 21, posted (9 years 7 months 2 weeks 2 days 17 hours ago) and read 2660 times:

Quoting Jacobin777 (Reply 20):
Mrniji, if you think AI's policies are arcane, PK's business policies are shrouded in mystery.........

Business policies AI and PK?? Big grin - just kidding, but interesting point!

Quoting Jacobin777 (Reply 20):
1) PK has had a 40 year history with Boeing, going back to the 707's
2) I'm sure there was probably some politics involved

1.) yeah, but they fly A310, too (do they still operate the A300s? - I remember seeing them in Delhi years ago, one of the best planes I have seen!)


User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59
Reply 22, posted (9 years 7 months 2 weeks 2 days 17 hours ago) and read 2665 times:

Quoting Mrniji (Reply 21):
Business policies AI and PK?? Big grin - just kidding, but interesting point!

being part Pakistani and part Indian (amongst other things, which makes me a mutt), I know exactly where you are coming from....I'm not sure if "sound business policies" and "PK/AI" should be in the same sentence...but I think both have made improvements over the past few years..while I've never flown AI (my dad just did last week, and he likes the business class quite a bit, in fact, he's going to be using them from now on), I actually like PK's service (my mother swears by PK)...and actually, for the price-$2,300 w/tax for roundtrip business class from ORD-KHI-ORD, its probably the best price/service ratio I've ever seen..and some of those PK pilots are old airforce pilots, so they really know how to fly planes.  biggrin 

Quoting Mrniji (Reply 21):
1.) yeah, but they fly A310, too (do they still operate the A300s? - I remember seeing them in Delhi years ago, one of the best planes I have seen!)

here is PK's fleet....and they will be getting some 777-ER's coming soon..which I've heard might be used to service LAX (which I was told might be starting by summer 2005)..

the 777's service ORD, YYZ, IAH (thought its frequented JFK a few times)

Boeing 747-300 6
Boeing 747-200 4
Boeing 777-24ER 3
Airbus A-300-B4 6
Airbus A-310 12
Boeing 737-300 7
Fokker F-27-200/400 8
Twin Otter 2

Total 48 Aircraft



"Up the Irons!"
User currently offlineKaran69 From India, joined Oct 2004, 2893 posts, RR: 18
Reply 23, posted (9 years 7 months 2 weeks 2 days 10 hours ago) and read 2570 times:

Quoting Jacobin777 (Reply 22):
Boeing 747-200 4

What routes do the 747-200s serve


User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59
Reply 24, posted (9 years 7 months 2 weeks 2 days 9 hours ago) and read 2528 times:

Quoting Karan69 (Reply 23):

What routes do the 747-200s serve

they primarily serve Pakistan/Europe (United Kingdom) route.......



"Up the Irons!"
25 BandA : good point! No complaints here either. a bit off-topic here but do PIA 777's have PTV's?
26 DIJKKIJK : yes, they do.
27 Jacobin777 : yes they do, but not on all their planes...while PK's IFE are not like EK's "ICE" or SQ's IFE's, it is still not too bad.... here is the list Persona
28 Jacobin777 : I'll stand corrected.........but these figures are not for 2nd half 2004/1st half 2005 where fuel prices have really gone through the roof... as I me
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