UALMMFlyer
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AI May Be Asked To Renegotiate Its Boeing Order

Thu Dec 15, 2005 6:57 pm

Hope this is not true!!

Will Air India ever get this deal done?

IIRC, Indian Air's Airbus order took three years to get approval.

I don't mean to disrespect anyone, but is this the common practice for Indian government to do business?  confused 

Quote:

The government seems to be inspired by the Indian Airlines (IA) case, where it could save a considerable sum after renegotiate with Airbus for the supply of 43 aircraft. The deal, closed at Rs 9,890 crore in September ’05, saved Rs 349 crore ($75m). The re-negotiation was done by an empowered-Group of Ministers chaired by finance minister P Chidambaram.

http://economictimes.indiatimes.com/articleshow/1332900.cms
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manni
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Thu Dec 15, 2005 7:06 pm

Hmmm, maybe they got a phonecall from Dixon? Or perhaps Leahy... pointing out what QF payed for their 787's.  Silly
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leelaw
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Thu Dec 15, 2005 7:21 pm

Quoting Manni (Reply 1):
maybe they got a phonecall from Dixon? Or perhaps Leahy... pointing out what QF payed for their 787's.

They don't need to get a phone call from anyone, they read the papers and browse the internet. The OEMs have to be prepared to accept the likelihood of ponderous negotiations and governmental approval processes if they want to do business with this airline.
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garpd
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Thu Dec 15, 2005 7:27 pm

Quoting Manni (Reply 1):
Hmmm, maybe they got a phonecall from Dixon? Or perhaps Leahy... pointing out what QF payed for their 787's

More sour grapes eh?
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manni
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Thu Dec 15, 2005 8:01 pm

Quoting GARPD (Reply 3):
More sour grapes eh?

Woow, lighten up already... if a good laugh isn't allowed anymore...
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Leskova
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Thu Dec 15, 2005 8:36 pm

Is the Indian government really so obsessed with using every even remote possibility of making AI the laughing-stock of the industry?

I mean, seriously, this has to end - actually, it should have ended a while ago!!!

Quoting GARPD (Reply 3):
More sour grapes eh?

Oh lord... what can you say to a comment like this one, except...  Yeah sure


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PanAm_DC10
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Thu Dec 15, 2005 8:40 pm

Not that I can provide a source, just my opinion. I'll say this deal is closed by year end and on the books at Boeing by Dec 31st.

To those who want a source, I can't provide one. It is simply my opinion. If wrong, I understand the taste of crow is better baked than boiled.  Smile

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LAXDESI
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Fri Dec 16, 2005 1:48 am

Quoting PanAm_DC10 (Reply 6):
Not that I can provide a source, just my opinion. I'll say this deal is closed by year end and on the books at Boeing by Dec 31st.

It certainly will happen by the time George Bush visits India early next year. This deal will go through.
 
NYC777
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Fri Dec 16, 2005 1:53 am

Indians (speaking as one, of course) are always trying to negotiate the price down to the very last penny...we're very cheap this way. Not something people outside of India understand to well...it's just an Indian thing.
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HAWK21M
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Fri Dec 16, 2005 5:45 pm

First Delays
Then Bargaining.
Hopefully the Deal is Inked latest by Feb 2006.
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PanAm_DC10
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Fri Dec 16, 2005 5:51 pm

Quoting HAWK21M (Reply 9):
First Delays
Then Bargaining.
Hopefully the Deal is Inked latest by Feb 2006.
regds
MEL

Does that mean I'll have to roast my crow instead?  Smile

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jacobin777
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Fri Dec 16, 2005 6:18 pm

Quoting NYC777 (Reply 8):
.it's just an Indian thing.

Indo/Pak thing.........in other words........."DESI-POWER".... Silly
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LH459
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 5:07 am

Quoting NYC777 (Reply 8):
Indians (speaking as one, of course) are always trying to negotiate the price down to the very last penny...we're very cheap this way. Not something people outside of India understand to well...it's just an Indian thing.

I've encountered this many times with Desi clients--as you say, it's just an Indian thing, and it's just the way it is! I don't mind anymore. In fact, I've learned to work with it, which is why I'm the only one in my office with a strong Desi clientelle base!
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NYC777
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 5:13 am

Quoting LH459 (Reply 12):
I've encountered this many times with Desi clients--as you say, it's just an Indian thing, and it's just the way it is! I don't mind anymore.

But it's still embarassing nontheless. I wish that once Indians have negotiated a deal they stick with it!
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dl021
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 5:23 am

Quoting NYC777 (Reply 13):
I wish that once Indians have negotiated a deal they stick with it!

I know it's a fundamental cultural difference, but it's really difficult to do business with someone raised in a society where a deal is never a deal. Speaking as one who has spent a good bit of time negotiating with Asians from the old country I'll say that a handshake is worth much much less than a cashed check. It's not perfect elsewhere, but damn, it sometimes appears that India wrote the book on how to make things difficult. It leads to bad feelings.

That said, I'd be surprised if Boeing was surprised since the Indian government just got away with this over at Airbus. Even though there was some anger behind that renegotiation the Govt saw some reduction in prices and decided that was the way to go from now on.

[Edited 2005-12-16 21:25:15]
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jaysit
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 5:39 am

Quoting UALMMFlyer (Thread starter):
I don't mean to disrespect anyone, but is this the common practice for Indian government to do business?

Yes.
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Quoting DL021 (Reply 14):
I know it's a fundamental cultural difference, but it's really difficult to do business with someone raised in a society where a deal is never a deal. Speaking as one who has spent a good bit of time negotiating with Asians from the old country I'll say that a handshake is worth much much less than a cashed check. It's not perfect elsewhere, but damn, it sometimes appears that India wrote the book on how to make things difficult. It leads to bad feelings

True enough, but both Boeing and Airbus know who they're dealing with. And while the Indians in the Indian government in the past were just lazy and stupid and corrupt and had no idea why airplanes were even needed, the current lot seem to be crafty in their ability to play up the "we're Indian, this is the way we do things, give us your best price" schtick to their advantage.
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mariner
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 5:39 am

Quoting Leelaw (Reply 2):
they read the papers and browse the internet.

That could be part of the problem - especially if they read airliners.net.

cheers

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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 6:39 am

Quoting Jaysit (Reply 15):
True enough, but both Boeing and Airbus know who they're dealing with. And while the Indians in the Indian government in the past were just lazy and stupid and corrupt and had no idea why airplanes were even needed, the current lot seem to be crafty in their ability to play up the "we're Indian, this is the way we do things, give us your best price" schtick to their advantage.

Of course Boeing could note that QF decided that they were going to send out an RFP for a megaorder (and turned out to be megaorder of a single family) to get better prices. Boeing should say we are willing to make a similar deal if you increase your order size. 45 787s with options for 70 more for AI! 42 777s for AI!
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Gr8Circle
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 6:49 am

Quoting NYC777 (Reply 13):
But it's still embarassing nontheless. I wish that once Indians have negotiated a deal they stick with it!

What's wrong in negotiating for the best price...? It's government (ie. the people's) money they're spending....got to do the most responsible thing, right? Of course, I'm not condoning the loss of business and image that AI has suffered due to delayed fleet modernisation and expansion....but you guys can't just fault the govt. for trying to spend public money in the best possible manner...

Some airlines will complete their requirement study to order placement cycle much faster and some , like the govt. owned airlines, will take longer.....

Cos. like Boeing and Airbus have to be patient if they want to close multi-billion dollar deals for their products....if they're too impatient, they can just step back and let the other guy take the order...do we ever see that happening???? NO WAY!!!!
 
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 8:40 am

Quoting Gr8Circle (Reply 18):
....but you guys can't just fault the govt. for trying to spend public money in the best possible manner...

Right, and all of a sudden this is a concern of the government? This is most likely another round of pocket lining rather than price negotiations.
 
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RE: AI May Be Asked To Renegotiate Its Boeing Orde

Sat Dec 17, 2005 8:57 am

Quoting Gr8Circle (Reply 18):
It's government (ie. the people's) money they're spending....got to do the most responsible thing, right? Of course, I'm not condoning the loss of business and image that AI has suffered due to delayed fleet modernisation and expansion....but you guys can't just fault the govt. for trying to spend public money in the best possible manner...

 rotfl 

Uh oh, gotta raise the BS flag here!  redflag 

Sorry to be so cynical, but the GOI is not doing this to get a better deal for the Indian public. A few government officials are most likely doing it to see how they can better skim a few extra rupees off the top for themselves. GOI has never been that altruistic.
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blrsea
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 10:07 am

GOI actually managed to reduce the airbus price by around $50 million for IC after renegotiation, and got them to agree to a maintenance or trng center in India. So, I don't fault them for renegotiating with Boeing for IA order too. And in India, the CAG has to audit the accounts and report back to Parliament. Pocket lining doesn't happen when the govt team negotiates with a company. It will most likely be done through intermediaries with as few people involved as possible  Wink
 
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 10:13 am

Quoting PA110 (Reply 20):
A few government officials are most likely doing it to see how they can better skim a few extra rupees off the top for themselves.

Rupees? I doubt they want rupees.
 
DarthRandall
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 10:56 am

What an unexpected turn of events! Apparently dealing with Air India is like trying to sign an athlete represented by Drew Rosenhaus.

Quoting LAXDESI (Reply 7):
It certainly will happen by the time George Bush visits India early next year. This deal will go through.

As long as Rove has the forethought to remind George that it isn't a good idea to try to endear himself to the locals by displaying his "hogtieing" skills with their cows.

Quoting Mariner (Reply 16):
That could be part of the problem - especially if they read airliners.net.

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subkk
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 3:13 pm

Hi

I guess they realised that, still few concessions could be worked out. Suddenly with all big ticket purchases for commercial airplanes and defence deals, GOI seems to have realised that they could save few pennies more if they try and renegotiate. Else the order goes to competitor. Just pure commercial sense for once.
 
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 3:45 pm

Quoting UALMMFlyer (Thread starter):
I don't mean to disrespect anyone, but is this the common practice for Indian government to do business?

Quote:

The government seems to be inspired by the Indian Airlines (IA) case, where it could save a considerable sum after renegotiate with Airbus for the supply of 43 aircraft. The deal, closed at Rs 9,890 crore in September ’05, saved Rs 349 crore ($75m). The re-negotiation was done by an empowered-Group of Ministers chaired by finance minister P Chidambaram.

It seems to me that using this renegotiating tactic could easily backfire in a big way on the Indian Government this time around. This time, the order is for the B787 -- an aircraft that is in very strong demand now with very limited delivery slot availability.

Boeing could simply refuse to lower the price significantly and do so without too much worry in my opinion.
 
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sat Dec 17, 2005 4:21 pm

Quoting Mariner (Reply 16):
That could be part of the problem - especially if they read airliners.net

Haha!  laughing  My ribs hurt after reading that. Nice!
 
Gr8Circle
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sun Dec 18, 2005 8:51 am

Quoting Sammyk (Reply 19):
This is most likely another round of pocket lining rather than price negotiations.



Quoting PA110 (Reply 20):
few government officials are most likely doing it to see how they can better skim a few extra rupees off the top for themselves.

Notice how the words 'this is most likely' keeps appearing in the postings you guys make...thanks for admitting that what you are saying is just your imagination...what do you base your observations on??? Were you there in the room when the decisions were taken by the concerned officials?  

Your comments need to be a little more matured....who was that raising the BS flag...........???

[Edited 2005-12-18 01:01:02]
 
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sammyk
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sun Dec 18, 2005 12:07 pm

Quoting Gr8Circle (Reply 27):
Notice how the words 'this is most likely' keeps appearing in the postings you guys make...thanks for admitting that what you are saying is just your imagination...what do you base your observations on??? Were you there in the room when the decisions were taken by the concerned officials?

Obviously none of us were in the room during negotiations but saying "most likely" does not mean it is just our imagination. To think that the Indian government is trying to get a better deal in the interest of the people of India is using ones imagination. Do you honestly think that any savings from this, or any other deal, will be passed on to the people? This is the Government of India we're talking about here. Lets be realistic.
 
Gr8Circle
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Sun Dec 18, 2005 10:56 pm

Quoting Sammyk (Reply 28):

You're just answering your own question....I don't think you're in a position to pass judgement on governments.....
 
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Mon Dec 19, 2005 5:22 am

Quoting Gr8Circle (Reply 29):
You're just answering your own question....I don't think you're in a position to pass judgement on governments.....

And you are? You're making an assumption just like others, just in the opposite direction. Just that what most are assuming is probably closer to reality than what you are assuming.
 
blrsea
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Mon Dec 19, 2005 5:29 am

Quoting Sammyk (Reply 28):
Do you honestly think that any savings from this, or any other deal, will be passed on to the people? This is the Government of India we're talking about here. Lets be realistic.

Amount has been saved earlier in the IC deal, and no doubt something will be saved here too. Plus during the IC negotiation, they got airbus to open a maintenance center in India. So, trying to dismiss every negotiation as a money-making excercise is too extreme. India is not a tin-pot dictatorship. The Comptroller and Auditor General (CAG) goes through each deal, and even in both AI and IC cases, the deal was scrutinized by CAG prior to cabinet approval. The CAG is answerable to the parliament, not to the government. I am not saying that no bribes will be given, but trying to equate every delegation level meeting with bribe negotiation is being too cynical. Add to the fact that all US corporations have been barred from giving bribes to secure commercial deals, and AI deal is not a hugely critical one like Quantas order.

Indian govt may be corrupt, but there are still quite a few honest individuals in the system.
 
lh477
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Mon Dec 19, 2005 7:18 am

If AI can get away with it...good for them, all the power to them.

As far as Indian negotiators...you'd want one your side, and not on the other side.

A done deal is never a done deal in India......
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sammyk
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Mon Dec 19, 2005 4:48 pm

Quoting Blrsea (Reply 31):
Amount has been saved earlier in the IC deal, and no doubt something will be saved here too. Plus during the IC negotiation, they got airbus to open a maintenance center in India. So, trying to dismiss every negotiation as a money-making excercise is too extreme. India is not a tin-pot dictatorship. The Comptroller and Auditor General (CAG) goes through each deal, and even in both AI and IC cases, the deal was scrutinized by CAG prior to cabinet approval. The CAG is answerable to the parliament, not to the government. I am not saying that no bribes will be given, but trying to equate every delegation level meeting with bribe negotiation is being too cynical. Add to the fact that all US corporations have been barred from giving bribes to secure commercial deals, and AI deal is not a hugely critical one like Quantas order.

Indian govt may be corrupt, but there are still quite a few honest individuals in the system.

I never said that they wouldn't be able to save money or that it was even a bad thing to try. I also didn't say all gov't employees were bad. I just don't think that they are simply doing this to save tax payer money. Yes, bribes are barred but they find other ways to get them what they need.
 
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HAWK21M
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RE: AI May Be Asked To Renegotiate Its Boeing Order

Mon Dec 19, 2005 6:09 pm

Quoting Sammyk (Reply 33):
Yes, bribes are barred but they find other ways to get them what they need.

Ever spoken to a Mx Stores Mgr on the 0.1% of commission offered by a vendor  Smile
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