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China Airlines-A340 Or 777?

Wed Aug 11, 1999 11:49 am

China Airlines is today signing the contract for 15 Airbus A340-300s instead of the B777.

Everybody knows that the political tention between China and Taiwan had been intense-infact a few days ago a Taiwan F16 was about to fire at a Chinese Mig between the Taiwan and China seas. Now the Taiwan government is pis*ed off at US for not helping Taiwan defending and hence Boeing is from US, the Taiwanese governemtn ordered China Airlines to order Airbuses instead.

But China Airlines insists the Airbus order is because of other factors, not political. but personally I reckon it is polictial.

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RE: China Airlines-A340 Or 777?

Wed Aug 11, 1999 12:21 pm


Here in Taiwan this issue is a HOT one to say the least.

The A340s (and A330s) were selected -2- months ago well ahead of this crisis.

I ask you to walk with me on this:

To wit:

1.) CAL's executive staff made their recommendations for the purchase in June.
Airbus won. Boeing knew that it was facing tough competition from Airbus here.

They got the US Trade Department involved, William Daley, Ms Barshevsky? and other lobbyists involved. Senator Slade Gorton was so confident that he sent a letter congratulating the ROC Government and CAL for their selection of the 777. Then a week or so passes before realizing that they had changed their mind going with Airbus. Another letter is sent to the Ministry of Foreign Affairs I believe which is then forwarded to the Taiwan CAA, expressing the senators' regret on this and how it could affect "Taiwan US relations".

2.) July 9th. President Lee makes his "state to state" declaration. Remember now this is -after- CAL's executive board made their decision!!!

3.) Same week. A story appears in Flight International- It pointed out that CAL selected the A340 and A330. -I- reported this here as well!

4.) Last week a story appears in the Tacoma Tribune (Washington State...who do you think they are in favor of?..Boeing maybe?) saying the Taiwan Government ordered CAL to switch to Airbus as a response to the US Administrations' response to Taiwan over this "State to State" issue.

I'm beginning to believe this story as reported by the Tacoma Tribune was a intended to whip up a frenzy. Boeing lost this deal on commercial grounds but there was a new way to put pressure now on CAL..A-HA!!..Lets use this crisis to put pressure upon them..They'll crack then!

5.) Now..we have Congressmen and Senator Slade Gorton beating a path to Taiwan..and in not so many ways..threatening Taiwan with no support if they elect to buy Airbuses. Saying "Who is going to support you? The French?" unquote.

6.) Meanwhile the US Administration has been chastising Taiwan for speaking it's mind. From Medeleine Albright's "The current explanation just doesnt quite do it" to Clinton's statement that Taiwan should adopt or consider Hong Kong's "One Country , Two Systems" model at a press conference, to a statement made by the top US Commander in Asia that Taiwan is nothing more than "Excrement".

The US Administration has behaved abominably to Taiwan and as the article I reference in yesterday's Wall Street Journal stated...Taiwan -should- have switched on political reasons alone given the way it has been treated by Washington. CAL maintains that it was a purely commercial decision and I believe it should be respected as such given all the background that is known on this.

Now who is playing politics with whom?! Payback in commercial deals for strategic politics? That is beyond the pale. Taiwan should be able to buy jets from anyone it wants to. Period.

Read yesterday's Wall Street Journal editorial "Airplane Politics" a few times. It's an eye opening read.

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Remember China Airlines Signed A LOI 4 777s

Wed Aug 11, 1999 1:39 pm

Hey but you have to remember that China Airlines signed a letter of intent for B777s some time ago. It was a speculation until now.
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LOI's Are -not- Purchase Orders

Wed Aug 11, 1999 6:25 pm

A Letter of Intent is simply that, a letter of intent. One is intending to buy the airplane, very interested in the airplane.

It is NOT to be confused with a --purchase order--, nor a contract to purchase, but that depends upon the agreed language written on it.

Generally these are quite flexible.

Where it really counts is if a deposit was placed on these and I believe this was not the case. CAL wanted to have the flexibility of ordering these at a future date, with favorable delivery slots and so forth, but it is in NO way a locked in agreement! LOI's are frequently cancelled or amended.

EVA Air cancelled it's LOI for the A340-500/600 as well..I didnt see Airbus or the French government having a heart attack over that.

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CAL Airbus Signing Ceremony Tomorrow

Wed Aug 11, 1999 9:22 pm

CAL's signing ceremony with Airbus Industrie's Vice Chairman John Leahy will be tomorrow Thursday 12 August at 3pm in Taipei.

Taiwan news media is reporting this will be for 7 A340-300 aircraft. Options will be announced at the ceremony, which are expected to add a minimum of 1 additional A340, as well as 4 A330-300 models. More will be coming out in the media tomorrow.

The 777 order is indeed -history-. CAL's Chairman said on Saturday that the A340 was selected for several reasons. "Safety, price, better financing, after sales support" to name a few. The "safety" reasoning in that should be an interesting one to explore later on as this deal is analyzed.

Maybe CAL believed the 777 carried some risks they were not prepared to have or accept on long range flights, particularly trans-pacific and the routing CAL has to use. This is very important to realize.

It also wants the capability to fly unhindered on long range flights to Europe, currently requiring stops at Abu Dhabi and Bangkok. Some of the routing CAL must make also is in reference to it's political situation with many countries not recognizing it, and most probably pressure from the PRC on those countries to deny access to these countries airspace.

If one doesnt believe or has a hard time understanding that, then one needs to look at the fit they threw over JAL, Qantas, British Airways, KLM, Air France, Swissair and others who flew to Taiwan and the PRC, threatening their landing rights in China if they didnt stop their flights to Taiwan. What happened instead were many mini-airline subsidiaries created like Japan Asia, Australia Asia, British Asia Airways, Swissair Asia, KLM Asia, Air France Asie, and even CAL joinng along so it could maintain it's lucrative routes with Mandarin (a CAL Subsidiary) flights could be still maintained, albeit with different names.

This goes to expose the level of intricate maneuvering Taiwan and it's airlines have to go thru. It's also quite similar to the bullsh*t El Al put up with in the 70s and 80s.

If one remembers, CAL ordered the 747SP in the 70s so it could achieve long distance flying with an airplane capable of doing so nonstop from Taipei to New York, on the westbound leg flying thru Anchorage. Why? Primarily for that very problem with routing and politics..thanks to the tantrums of the Mao Jacketed Thugs in Beijing.

So this in retrospect could very well be a case of history repeating itself in some ways, while it also wants to upgrade and renew it's fleet with what it views is it's best, most capable choice. The 777 may have been right for some routes, but in the long view it may have been hamstrung with several technical problems with specific reference to ETOPS and the routing given Taiwan's political position.

It would not make sense to order an airplane, no matter how fine it is, if it cant fly the routes -you have to fly-.

CAL is not in an advantageous position like UAL or NWA, with overflights of the Soviet Union on the new flight tracks Polar One, Polar Two and now the new Polar Three. One must sit back and look at it and understand there are factors quite different to consider.

Some words to ponder over.

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And Here We Have Another Rebound For Boeing!

Wed Aug 11, 1999 10:26 pm

All right! And the story goes on and on, Airbus AGAIN is beeting Boeing on the final aproach!
CV990, the Maserati of the skies!
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RE: And Here We Have Another Rebound For Boeing!

Thu Aug 12, 1999 12:10 am


I believe CAL made a wise decision for itself, benefitting both airframe manufacturers, as well as two major trading partners Taiwan has.

Taiwan needs as many friends it can get and Europe is indeed part of that. There is no monopoly on "friendship" either.

Boeing made out just finein this deal, with the largest purchase of 747-400F's ever made. It also signaled an end to the order holiday that has been in place since the onset of the Asian Economic Crisis. All signs are up for it if it plays it's cards right along with it's product line. This purchase of Airbus products gives it's product added clientele in Asia which will add to it's acceptance here too.

It's Win-Win for all and I hope all, particularly those on the Boeing "side of the fence", can understand this.

It's not all about -one- airplane manufacturer.

It's about two major manufacturers. And Two Major partners that trade with Taiwan. That's what competition is about; Choice in Price and Product.

Taiwan is a great friend to these to trading partners, with over $32 Billion in Imports from the US alone to Taiwan averaged annually. I can buy US, British, German, Japanese, French, Italian cars here. I can shop at French supermarkets (CarreFour and Continent) as well as Japanese supermarkets (Shin Kong Mitsukoshi), eat McDonalds, Wendys, BurgerKing hamburgers, etc. Taiwan is in many ways an ecelectic example of trade at it's most diverse, offering choice, quality and value to all.

Thank God for it.

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The Numbers

Thu Aug 12, 1999 12:37 am

CAL ordered

747-400F: 13 Orders 4 Options
747-400: 2 Orders
737-800: 5 Orders

A340-300: 7 Orders 1 Option
A330-300: 4 Orders

It is being reported that the reason the order was not for A340-500s was due to preference in wating for the 747-400ER.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
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RE: China Airlines-A340 Or 777?

Wed Aug 18, 1999 11:00 pm

factually incorrect! China Airlines split the order giving Airbus the order for A330/340, but gave Boeing a cushy order for 19 (inc.options) 744.
« On ne voit bien qu'avec le cœur. L'essentiel est invisible pour les yeux » Antoine de Saint-Exupéry
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Joined: Wed Apr 07, 2010 7:32 am

Boeing's Reaction

Thu Aug 19, 1999 9:36 am

Boeing really, had a 'heart attack', in Taiwan news, a Taiwan English newspaper, it said that Boeing was really disappointed with the Airbus order. I'm not being anti-Airbus here, but personally I like 777 the best. Anyway, still, China Airlines signed up for 13 744Fs and 738s, I suppose that's good for Boeing.

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