United777
Topic Author
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Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 4:27 am

Boeing is offering to buy Air India's Boeing 747-200 and 747-300 combi's if it orders the 777-200ER.

They did the same for SIA wit the A340-300's for 777-200ER's and it worked. Lets see if Air India will do the same.

http://biz.yahoo.com/rc/030207/airlines_india_boeing_1.html
 
kaitak
Posts: 9131
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 4:48 am

Yes, the 340 purchase from SQ worked insofar as SQ bought 777s (and quite a lot of them!), but they still have 340s to place.

With AI, the problem is in one sense easier; the old -200s, I'd imagine, would either be converted to freighters or, more likely, scrapped. The -300s could, however, have a life as freighters; well, they're half way there already!

But what I'm also wondering is, why? For political reasons, following the IC order for 32Xs, Boeing was likely to get the 777 order anyway, so why involve the 747s at all?
 
B747-437B
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 4:54 am

Boeing is extremely concerned that Airbus is offering kickbacks to India to send BOTH the AI and IC orders to them. Based on information that I have, there is IMMENSE pressure from the Ministry on AI's board and technical committee to pick the A340 over the B777 - and is the main reason why the process is stalling right now. Essentially Airbus is offering HAL in Bangalore a bunch of component production contracts for the A380, but ONLY if the AI and IC orders go to Toulouse.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
N79969
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 4:58 am

-437B,

When you say "kickbacks" do you mean offsets or actual cash to key officials?
 
United777
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 5:01 am

Here is another article about the AI and IA order from the Seattle Times.

http://seattletimes.nwsource.com/html/businesstechnology/134630017_boeingindia07.html
 
United777
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 5:09 am

Well one thing is for sure who ever wins the order either Airbus or Boeing they will be bragging about it for years. After these two orders I don't see another big airplane ordering coming from India for another 10 years. Except for the private airlines such as Jet Airways. I could see them ordering more 737-900's.
 
B747-437B
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 5:36 am

When you say "kickbacks" do you mean offsets or actual cash to key officials?

Undoubtedly a mixture of both.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
N79969
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 5:40 am

That sucks....Boeing's hands are tied in that arena. Perhaps they could send 7E7 work to India...bribes are out of the question for Boeing. I get a sinking feeling that the A340 will win another one.
 
B747-437B
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 5:49 am

Boeing's hands are tied in that arena.

Don't kid yourself. Boeing is just as capable of providing "incentives" to decision makers as Airbus is, even if these come in the form of "consulting fees" and other smokescreens. It's happened before and will undoubtedly happen again.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
N79969
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 5:52 am

I agree with you to the exten that Boeing will do everything short of outright bribery. The Foreign Corrupt Practices Act is pretty strict and can result in prison time. I am sure there is no shortage of whistle-blowers who would love to see a Boeing exec head to prison.
 
yago
Posts: 228
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 7:37 am

Bribery is also forbidden in Europe.
Please stop believing you live in Disneyland.

Airbus and Boeing being such big companies will use bribery without any problem.
 
747-451
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 9:24 am

"Bribery is also forbidden in Europe"

and so are susdies  Yeah sure
 
747-451
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 9:26 am

subsidies .........................
 
racko
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 10:28 am

Nope, they aren't. But there are strict laws and every subsidy decision is controlled by the EU.
 
United777
Topic Author
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 2:13 pm

If Airbus or Boeing wanted the AI order and are fighting for it how come they didn't fly a house color A340-300 or 777-200 to the Aero India show in Bangalore for a demo like they do at other airshows.

It would have been nice to see one of them do that for India. Boeing could have also showed of the 737-900 for Indian Airlines.

I know Aero India is mainly a defense air show but it turns out this year it is turning out to be a fight between Airbus and Boeing for Air India and Indian Airlines.
 
cloudy
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 2:30 pm

Bribery of may be forbiden in Europe, but is Bribery of foreign officials illegal? Even if it is done outside of Europe? Is this true in every European country?
All you need is one country where the law can be interpreted your way.

The Foreign corrupt practices act is NOT something US companies ignore lightly, because the penalties are so high. Not just in terms of jail time, but fines and PR. After Enron, people want to look clean.
But there could be ways arround it. A foreign subsidiary, perhaps? Or an unspoken "don't ask don't tell" policy that lets the local peons take the fall? Ya never know.

But we don't know. None of us that I have heard from so far are experts in this area. I have heard that it is much harder for US companies to get away with bribery - and that this is a major disadvantage for the US in negotiations with less-industrialized customers. But its hard to know. When you do stuff like this, you don't advertise it.



 
gigneil
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 3:05 pm

Sending component production to a country to win orders is hardly new to either Boeing or Airbus.

Why do you think Japan loves the 777? The entire 777 wing is assembled there.

Its also hardly illegal.

N
 
B747-437B
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 4:12 pm

According to a report today, France is now offering advanced co-operation in the area of nuclear technology if India commits to the Airbuses over Boeing.

http://in.news.yahoo.com/030207/58/20wbx.html

This bidding war is getting amusing. Big grin
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
ammunition
Posts: 875
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RE: Boeing Wants To Buy AI 747s For 777s

Sat Feb 08, 2003 9:43 pm

Both the A340 and 777 series of aircraft are excellent, and i personally wouldnt mind seeing any in the AI livery.
I cant help but think that air india will try and sqeeze every last thing from the manufacturers to gain the best deal, obviously india has a phenomenal potential and any manufacturer to gain a foothold in the market will be laughing all the way to the bank, the rewards may not be immediate.

Could airbus offer something similar? buy the 744 aircraft off AI for A340's? Would this be the first time airbus would do this?

What are the chances of a completely new air india fleet within 5 years?

Saint Augustine- 'The world is a book and those who do not travel, read only 1 page'
 
IndianGuy
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RE: Boeing Wants To Buy AI 747s For 777s

Sun Feb 09, 2003 2:12 pm

According to the ToI, an Indian Software Company, INFOSYS has been signed on to do Wing Design work for the Airbus A380 in a multi-billion dollar deal!

Looks like the French are really laying it on thick!


-Roy
 
cloudy
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Joined: Sat Apr 06, 2002 3:23 pm

RE: Boeing Wants To Buy AI 747s For 777s

Sun Feb 09, 2003 2:48 pm

Are you sure you don't mean multi-million dollar, Indianguy? That would seem more realistic. I doubt all the software contracts for the A380 program would add up to a billion dollars.
 
Hamlet69
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RE: Boeing Wants To Buy AI 747s For 777s

Sun Feb 09, 2003 3:02 pm

Gigneil,

"Why do you think Japan loves the 777? The entire 777 wing is assembled there."

Where did you get that one from? The wing is perhaps the only thing that Boeing won't outsource - it's much too valuable. Compared to the wing, an aircraft's fuselage is just a metal tube. The 777's wing sub-assemblies are built throughout the U.S., and assembled in Everett (building 40-34, to be precise). They are then "flown" to the Final Body Join position in the adjacent assembly line, where the various other fuselage sections (all except Section 41 is manufactured in Japan) are mated to the wing and each other. Approxiamately 20% of the overall airframe is built in Japan.


Ammunition

"Could airbus offer something similar? buy the 744 aircraft off AI for A340's? Would this be the first time airbus would do this?"

I doubt AI is looking at selling the 747-400s, but like Boeing, I'm sure Airbus would be willing to purchase the -200s & -300s. And no, this would not be the first time Airbus has purchased used aircraft. The latest deal I can remember is the easyJet deal - Airbus is purchasing 10 737-300s from easyJet at garaunteed prices.

"What are the chances of a completely new air india fleet within 5 years?"

I've got a better one - What are the chances of any new Air India fleet in the next 5 years? With the bureaucracy of this country, I'd be very surprised if any purchase had been delivered in 5 years. (Okay, maybe I'm exagerating a little bit. . .)

Regards,

Hamlet69
Honor the warriors, not the war.
 
cloudy
Posts: 1613
Joined: Sat Apr 06, 2002 3:23 pm

RE: Boeing Wants To Buy AI 747s For 777s

Sun Feb 09, 2003 3:09 pm

Also, it is crucial to keep in mind the difference between "offsets" and bribery.

The benefits of ofsets and other side deals go to the country or the airline that they go to. The benefits of bribery - the bribe money - goes only to an official who is supposed to be making an objective decision based on his country's or his airline's interest. This why offsets, etc. are legal in most places, while outright bribes are not. The difference is who is getting paid off -the official or the country/airline?

One complaint the anti-free trade lobby in the US has made is that US companies do not demand offsets when buying from foreign sources. They act in their own interests. United did not demand an offset when buying the A320, for example. Nor can the US government offer preferential treatment in exchange for domestic aircraft orders - in fact, all ATSB loans so far have gone to big Airbus customers. But when Boeing makes similar deals oversees, offsets are demanded most of the time. And Europe constantly offers landing slots and all sorts of other preferential treatment to Airbus customers. As far as I know, even the US government does not demand offsets when purchasing goods for its own use. US suppliers are prefered by law, especially for military goods(as is the case in most nations), but when foreign suppliers must be used - the government does not demand offsets. I don't really know enough to comment on whether this charge has merit or not.
 
N79969
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Joined: Tue Jan 29, 2002 1:43 am

RE: Boeing Wants To Buy AI 747s For 777s

Mon Feb 10, 2003 11:11 pm

Until 1998 or so, bribes were tax deductible in virtually all of Europe as business expenses. I believe they are still legal in Belgium if you can meet some legal test showing that the bribes were necessary.
 
N79969
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Joined: Tue Jan 29, 2002 1:43 am

RE: Boeing Wants To Buy AI 747s For 777s

Tue Feb 11, 2003 12:23 am

 
fly707
Posts: 341
Joined: Sat Oct 27, 2001 9:43 am

RE: Boeing Wants To Buy AI 747s For 777s

Tue Feb 11, 2003 12:29 am

Why don't they order both Airbus & Boeing .
Without mistakes we will never learn
 
N79969
Posts: 6605
Joined: Tue Jan 29, 2002 1:43 am

RE: Boeing Wants To Buy AI 747s For 777s

Tue Feb 11, 2003 12:40 am

Based on what I have read so far, Airbus has structured the deal that India will only get Airbus subcontracts if and only if both carriers go with all-Airbus. -437B, correct me if I am wrong.
 
cloudy
Posts: 1613
Joined: Sat Apr 06, 2002 3:23 pm

RE: Boeing Wants To Buy AI 747s For 777s

Tue Feb 11, 2003 5:11 am

Why don't they order both Airbus & Boeing?
------

fleet commonality, silly  Smile . Use the search feature if you don't know what this means.

Thanks for the links, N79969. It surprised me that bribes to foreign officials have been deductible for so long in some European countries. In the US, not only is bribery of foreign officials NOT deductible, it is a serious criminal offense and has been for some time.

I would think that encouraging corrupt practices in a country would be considered a hostile act against that country. Even in most countries where bribery is culturally accepted, it is illegal to bribe domestic officials. Most governments, even in such countries, rightly view the culture of corruption as a problem to be combated and not something to be proud of.

Corruption is one of many things that help keep third world countries poor. Methinks it is not right for those more fortunate to use bribery to cloud the judgment of an official who's job it is to guard the interests of the less fortunate.

Though it must be tough, when all your competitors are doing it......

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