jacobin777
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Air-India Buys Its Way Into Losses

Fri May 13, 2005 2:42 pm

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
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jwenting
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RE: Air-India Buys Its Way Into Losses

Fri May 13, 2005 7:42 pm

And another one with no clue about economics...
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mrniji
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RE: Air-India Buys Its Way Into Losses

Fri May 13, 2005 7:46 pm

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
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HAWK21M
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RE: Air-India Buys Its Way Into Losses

Fri May 13, 2005 8:30 pm

Unless all required data is available.Difficult to comment.
regds
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jaysit
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RE: Air-India Buys Its Way Into Losses

Fri May 13, 2005 11:11 pm

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.
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DIJKKIJK
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RE: Air-India Buys Its Way Into Losses

Fri May 13, 2005 11:59 pm

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.
 
karan69
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 2:32 am

Bussiness
Politics
Poor Negotiation Skills


Take your pick
 
jacobin777
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 3:30 am

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 
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lh477
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 3:36 am

privatize......Likely not happen too soon....Laloo and Co. need their nice expensive toys...
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keesje
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 4:40 am

If it was decided for AI it had to be Boeing, Boeing would be foulish to give any discounts..
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atmx2000
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 5:30 am

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.
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hawaijahaz
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 5:39 am

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
 
keesje
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 6:01 am

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.
"Never mistake motion for action." Ernest Hemingway
 
atmx2000
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 6:29 am

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.
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jaysit
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 6:44 am

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.
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Planesmart
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 7:05 am

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?
 
BandA
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 7:40 am

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
 
jacobin777
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 11:59 am

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!!
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mrniji
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 2:38 pm

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
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777ER
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 2:41 pm

Quoting Jacobin777 (Thread starter):

Sounds like Boeing was a wise choice considering an Airbus purchase would have been worse
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jacobin777
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 3:06 pm

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."
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mrniji
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 3:11 pm

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!)
"The earth provides enough resources for everyone's need, but not for some people's greed." (Gandhi)
 
jacobin777
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 3:28 pm

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
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karan69
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 10:22 pm

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

What routes do the 747-200s serve
 
jacobin777
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RE: Air-India Buys Its Way Into Losses

Sat May 14, 2005 11:30 pm

Quoting Karan69 (Reply 23):

What routes do the 747-200s serve

they primarily serve Pakistan/Europe (United Kingdom) route.......
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BandA
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RE: Air-India Buys Its Way Into Losses

Sun May 15, 2005 1:07 am

Quoting Jacobin777 (Reply 17):

good point!

No complaints here either.

a bit off-topic here but do PIA 777's have PTV's?
"They [Terrorists] never stop thinking about new ways to harm our country and our people, and neither do we." - GWB
 
DIJKKIJK
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RE: Air-India Buys Its Way Into Losses

Sun May 15, 2005 2:26 am

Quoting BandA (Reply 25):
a bit off-topic here but do PIA 777's have PTV's?

yes, they do.
Never argue with idiots. They will bring you down to their level, and beat you with experience.
 
jacobin777
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RE: Air-India Buys Its Way Into Losses

Sun May 15, 2005 2:17 pm

Quoting BandA (Reply 25):
a bit off-topic here but do PIA 777's have PTV's?

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

Personal TV On
B-747.300 Flights (All Classes)
B-747.200 Flight (Business Class Only)**
A310 (Business Class Only)**

** Business Class B-747 200 and A310 (upgraded) - 1st twelve channels only

Video Programmes on B-777 Economy Class

The Business Class of B-777 aircraft is quipped with 10.4" TV screen and is provided with Audio/Video on Demand Controls. The interactive application offers audio and video selections to passengers who can individually control the functions of fast forward, rewind, pause, stop etc. Jukebox facility is also available in Business Class, giving the option to add or remove tracks from the custom play list - which can hold up to 99 tracks.
----

Video Programmes on B-777 200 Flights (Economy Class)


In Economy Class Video content is available in Digital Broadcast mode. However, once a video programme is selected, programme can be changed by using the up / down channel switch.


source: PK's website...
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jacobin777
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RE: Air-India Buys Its Way Into Losses

Sun May 15, 2005 5:21 pm

Quoting Jacobin777 (Reply 17):
I wouldn't be surprised if PK is also operating at a loss (I think they are

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 mentioned previously, I was told that PK might start LAX service this summer..

the reason the 777 serves "European routes" is because of the stop PK makes at MAN from ORD/YYZ/IAH.....
--------------

278TH MEETING OF PIAC BOARD OF DIRECTORS

Karachi April 28, 2004

PIA earned a profit of Rs. 1.4 billion ni the first quarter of 2004. The scheduled Passenger Traffic recorded a growth of 16.4% over same period last year at a seat utilization of 74.3%


The airline during the Quarter successfully inducted 3 new Boeing 777 aircraft. The aircraft are presently being operated on North America and Europe routes. Additionally there of a total of six half-life A-310 aircraft have also been inducted in the PIA fleet. The remaining three will join the fleet in June 2004.


With induction of the additional capacity the airline would be expanding its international network to include the following destinations:

Houston

Moscow

Milan

Shanghai

Urumqi

Ras-ul-Khaima

Fujaira

Los Angeles

followed by Nairobi, Damascus, Male and Glasgow by December 2004, brining the total international destinations to fifty.



source: PK website
"Up the Irons!"