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Air India Update

Tue Oct 08, 2002 4:52 pm

Is there any more news on Air India and their fleet renewal plans?
Have they decided on any aircraft yet?
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RE: Air India Update

Tue Oct 08, 2002 10:33 pm

Thats funny. Don't expect a decision on stage 2 for another 6-12 months at a minimum. This is Air India we are talking about. The board is still evaluating the 1955 proposal on whether to buy DC3s. Big grin
 
IndianGuy
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RE: Air India Update

Wed Oct 09, 2002 11:06 am

Sean, My source tells me that AI mgmt is now coming out with some hare-brained idea of leasing 737-800/900 eqpt! Is it wonder that the Civil Aviation Ministry guys dont take AI seriously anymore?

-ROY
 
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RE: Air India Update

Wed Oct 09, 2002 11:18 am

Actually the 737 NGs or the A320 family would be perfect for point to point daily services from various Indian destinations to the Gulf or SE Asia, and would avoid the ridiculous milk runs within India before the international leg of the India-Gulf/SE Asia flights.
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RE: Air India Update

Wed Oct 09, 2002 1:38 pm

Air India has confirmed it'll launch MUM-CDG-EWR from December 3.
 
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RE: Air India Update

Wed Oct 09, 2002 1:54 pm

Roy - Relax! The only thing happening with the narrowbodies is that they have formed a committee chaired by Capt. M.K. Hathi to examine the feasibility of that idea. I know Hathi personally and I am confident that he will be able to identify if the market exists or not. Even if he does come back with a report reccomending them, it still needs to be approved by the board - they have only approved the widebody purchase so far. The same commitee will be examining the exact technical requirements and making a reccomendation of either Boeing or Airbus. It's a long, bureaucratic process, but its moving, albeit slowly for now.

Jim - The BOM-CDG-EWR has been officially a go for over 2 months now. I remember posting this back on July 21. The public announcement was only made a couple weeks ago, but my sources for this kind of info are always correct. The only change to my original post is that the flights will operate omitting DEL for the winter schedule because of fog concerns.
 
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RE: Air India Update

Wed Oct 09, 2002 2:08 pm

Just wondering that how come Air India is now in a stage of "fast-expansion"?

 
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RE: Air India Update

Wed Oct 09, 2002 2:25 pm

Just wondering that how come Air India is now in a stage of "fast-expansion"?

I wouldn't call it fast expansion, Jim. They're merely increasing the frequency to New York City and Paris and re-starting FRA.
 
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RE: Air India Update

Wed Oct 09, 2002 9:16 pm


Actually the very fact that they are looking at narrowbodies like the 737-800/900 shows a general lack of direction at AI. What are they trying to do? Compete with IC? Instead of taking on EK and SQ, AI wants to buy 738’s and compete with IC!

The 738/9’s are being bought in only to serve the Gulf stations from smaller cities like CJB and TRZ which IC has been servicing satisfactorily using A320’s. Is this the role that AI was created for? AI loves to throw the rulebook at IC whenever there is talk of IC operating more intl. Flights. But the same rulebook is conveniently being sidestepped here!

AI will not bring in any added benefit by competing with IC here. So the big question is that should taxpayer’s money be used when there is no benefit to the Indian public?

It would be impractical to simply restrict IC to domestic routes and AI to intl. Routes. Instead what is required is to rationalize the route structure of both airlines to avoid competition between them. This requires that each carriers role be well defined. I believe IC’s current route structure accurately reflects its role as a domestic and regional carrier. It is AI that needs to rationalize its route structure and remold itself as a long-haul carrier.

What should AI be doing? IMO, AI should be building up its hub in BOM and connect stations in Europe/Africa and the ME with points in the Far-East like HKG, BKK, TYO, SEL and SIN. Ideally, AI should be operating a mix of MCLR category (A330-200/300, A340-300/500) aircraft and Boeing 747-400’s concentrated out of stations like BOM, DEL, COK and MAA. In addition stations like BLR/HYD can be connected with “hub-breakers” to LAX/FRA (imagine HYD-SIN-LAX using A340-500’s or AMD-BOM-JNB with A330-200’s). It is important that AI get out of its flying-bus approach to some routes. A routing like BOM-MAA-SIN is ridiculous since it adds 2-3 hours to what should be 4-5 hour affair non-stop. Is it any wonder that QF and SQ have the BOM-SIN market sewn up? The other state owned carrier IC could operate a narrowbody fleet built around the A32X family on routes across the SAARC region as well as selected routes that are best served by the smaller aircraft.

Cooperation between the carriers has to be improved; “Synergised” to borrow a phrase from our honorable Minister! So AI and IC must co-ordinate their schedules to ensure optimum connectivity. I hear AI is extremely uncooperative as far as adjusting their own schedules are concerned and they expect IC to operate spoke flights at ungodly hours. Co-operation isn’t going to get very far with people displaying this kind of attitude.

Better co-operation between AI and IC can lead to better utilization of AI’s fleet. For eg. The AI flight to JFK goes BOM-DEL-LHR-JFK. With IC operating almost hourly flights between BOM-DEL, it would be better if AI operates BOM-LHR-JFK, with DEL pax coming in on an IC flight from DEL. These pax can check-in and complete immigration formalities at DEL itself. This makes better sense that operating a half empty 747 on the 2-hour flight to DEL. Similarly, IC can co-ordinate with AI to ensure that some AI flights that must operate BOM-DEL (like HKG) can accommodate IC pax as well.

wrt the Gulf and SIN routes where the 2 carriers directly compete, flights to these destinations from BOM, DEL, MAA and COK could be handled by AI while IC could handle the rest like CCJ, BLR and HYD. If this kind of co-operation can be worked out, then AI doesn’t need to get these damned 737-800/900’s.

-Roy

 
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RE: Air India Update

Wed Oct 09, 2002 11:54 pm

Roy - You have a highly over simplified view of the situation. If only things were as simple as "get big planes and compete" then I think even AI would have figured it out a long time ago.

As long as AI and IC are seperate entities, AI simply cannot afford to delegate a vital component (namely domestic feed) of its network to them. At some point down the line some vague minister may decide to privatise one and not the other and then AI is up the proverbial creek without a paddle.

AI doesn't really have a choice about flight scheduling. The only way you can get a plane to/from North America and back in the same day is by running them at the hours that Air India does. That means early morning departures and late night arrivals. The domestic feed needs to run to suit those timings, which IC is unwilling to do. So AI runs those feeders themselves, using the A310 which is simply too large for those markets. Hence an examination of lower capacity aircraft is the responsible course of action.

Finally, for all your rhetoric about taxpayer money and accountability, Air India has been pretty self sufficient for the last 20 years. All capital improvements have been financed from the open markets and from operational revenues. The only role that the government plays is to guarantee loans from private lenders (since they own 100% of the equity) and to commandeer aircraft for VIP junkets.
 
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RE: Air India Update

Thu Oct 10, 2002 2:44 am

I have a simple question/response?? Does anyone think that any of LAX/SFO/YVR will ever be on the agenda???

Cheers
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RE: Air India Update

Thu Oct 10, 2002 3:23 am

Does anyone think that any of LAX/SFO/YVR will ever be on the agenda???

LAX/SFO - yes
YVR - no
 
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RE: Air India Update

Thu Oct 10, 2002 5:02 am

I think (and hope) that they will opt to renew the long/medium fleet with Boeing 777 variants. IC is already purchasing Airbus. A large order for Boeing would further cement the improved relations that have developed between the two countries since 9/11/01.
 
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RE: Air India Update

Thu Oct 10, 2002 9:07 am

Actually with Pakistani airspace closed to Air India, I think that the Bom-Del-Lhr flights go bom - del, then backtrack down the western boundary of India and over the Arabian Sea on a westbound track. That adds a total of nearly 4.5 hours to a Bom-Lhr flight, making a 3:30 am Bombay departure even more torturous.
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RE: Air India Update

Thu Oct 10, 2002 2:19 pm



As long as AI and IC are seperate entities, AI simply cannot afford to delegate a vital component (namely domestic feed) of its network to them. At some point down the line some vague minister may decide to privatize one and not the other and then AI is up the proverbial creek without a paddle.


Point taken. AI needs a domestic feed. But then it can also achieve this by tying up with a local carrier like IC or even 9W. 9W had agreed to operate domestic flights on AI’s behalf, and even a privatized IC can operate these feeder flights, provided they are viable. So impending privatization of IC is hardly any excuse to go out and buy a dozen 737’s! A Hub-and-Spoke agreement is a commercial agreement between 2 corporate entities

IC has no problem operating feeders for AI. It has been doing that for years now! But the thing is that these flights have to be viable. IC subsidiary Alliance operated a number of such code-shares (like DEL-ATQ) using their 737-200’s, which mostly went out with 2 or 3 passengers! AI has failed to deliver its promised loads. Surely you don’t expect even AI to operate a flight with such pathetic loads? I for one don’t believe that AI is going to use these 737-800’s only on domestic extensions.

AI is obviously eyeing flights out of smaller destinations like CJB, ATQ, LKO and TRZ to the Middle East and SIN, which have lately become money-spinners for IC, which operates A320’s from here. These 737-800’s would be perfect for these routes.

The question is if AI can get 737’s to compete with IC on these routes, why stop IC/9W from getting 747’s and flying to London?


Finally, for all your rhetoric about taxpayer money and accountability, Air India has been pretty self sufficient for the last 20 years. All capital improvements have been financed from the open markets and from operational revenues. The only role that the government plays is to guarantee loans from private lenders (since they own 100% of the equity) and to commandeer aircraft for VIP junkets.

First and foremost, the Govt owns AI. The only way a loss-making AI can get its aircraft financed is if their owner, the Indian Govt. stands guarantor. So the Govt.(like any other owner) does have an interest in ensuring that its interests are not affected. Similarly, the Govt. also owns IC.

Now you have a scenario where 2 Govt. owned carriers, instead of complementing each other, are competing with each other. With the arrival of the 738’s, the number of such overlapping routes is only going to increase. Hence the need to rationalize the route structure of BOTH carriers. Since AI has begun long term Fleet planning, it is important to define its role before undertaking that exercise!

Now when we define roles, it is important to apply consistent logic while distributing routes between the 2 state-owned carriers, which I talked about in my earlier post. Unfortunately, no such thing has been done, and such decisions are being taken in an ad-hoc manner.


N79969 wrote:
I think (and hope) that they will opt to renew the long/medium fleet with Boeing 777 variants. IC is already purchasing Airbus. A large order for Boeing would further cement the improved relations that have developed between the two countries since 9/11/01.

Aircraft purchases should not be based on politics. IC was under tremendous pressure in the 1980’s to accept 757-200’s which were too big and unsuitable for IC. Now similar pressure is being applied to make India balance out IC’s order for Airbus with a AI order for Boeing. This is preposterous. The Boeing 777 is a downright bad aircraft for AI, and Boeing itself seems to have realized this, hence these pathetic attempts to apply pressure.

-Roy

 
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RE: Air India Update

Thu Oct 10, 2002 2:43 pm

Roy - You are jumping 10 steps ahead criticizing moves that AI MIGHT make with aircraft that they MIGHT buy in a market scenario that MIGHT exist in a few years. As I mentioned, all they are doing is examining the pros and cons of a narrowbody order versus a regional widebody.

As for AI operating out of secondary markets, please don't think its being done out of choice. I'm sure everyone saw the huge opportunity in running GAU-BKK, which explains why all of 10 passengers (maybe that many if they were lucky) have actually bought tickets on that flight. I bet IC can't wait to have AI driven out of that market so they can take over.

AI cannot afford to commit to being a purely long haul carrier relying on others to provide regional and domestic feed. Pan Am was a prime example of why that model cannot work.

In brief, take a deep breath and wait for somethign to actually happen before you start going on about how bad it is.
 
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RE: Air India Update

Thu Oct 10, 2002 10:08 pm

How is the 777 a bad aircraft AI? Given the country's geography, ETOPS is not an issue. I see no advantage that the A330/340 could offer.

Also, I believe that IC's initial switch away from 757s to A320 was based on French "gifts" being distributed. Bribes are (were) tax-deductible as business expenses in France.

Of course politics should not affect these decisions. But the reality is that they are very political especially if the government owns the airlines. JetAirways wanted 757s over the 738s but the government blocked the purchase.
 
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RE: Air India Update

Thu Oct 10, 2002 10:45 pm

JetAirways wanted 757s over the 738s but the government blocked the purchase

Uh... thats the biggest load of hogwash I've read in a while. Jet has never intended to purchase or lease 757s, despite media reports to the contrary.
 
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RE: Air India Update

Thu Oct 10, 2002 10:45 pm

I thought that the Boeing 777-LR or even ER would be ideal for AI's US operations given that ETOPs restrictions dont apply and that the higher capacity of this aircraft over the A340 series would be a winner.
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RE: Air India Update

Thu Oct 10, 2002 10:50 pm


-437B,

Media reports are all I have to read. I'll take your word for it though. What about reports about the A320 purchase? Are those also untrue?
 
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RE: Air India Update

Thu Oct 10, 2002 10:59 pm

Taken from Flight International Copyright © 10/10/02


The Air India board has approved the airline's fleet expansion plans, with 17 long-haul aircraft due to join the fleet by 2008. The strategy also has provision for a smaller number of short-haul aircraft. Air India is looking for a mix of long haul aircraft, with one aircraft type to be used on routes to the USA and a larger type for routes to Europe. The Mumbai-based carrier is thought to favour a competition between the Airbus A340-500 and Boeing 777-200LR for the first batch of aircraft. The Indian flag carrier is evaluating the Boeing 747-400 for its 400-seater requirement, but could also look at the Airbus A380, if market studies show enough demand for a 500-seater aircraft. The board has yet to decide how many short-haul aircraft it needs, but has indicated that it requires an aircraft with around 160 seats, which could lead to a battle between the A321 and the 737-800. The short haul aircraft will be used on South East Asian and Gulf region routes.
 
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RE: Air India Update

Thu Oct 10, 2002 11:08 pm

The existing PW-powered 747-400 with a PIP engine upgrade can do ORD-DEL-ORD non-stop. The 772ER/777LR/773ER would be able to do the same.
 
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RE: Air India Update

Thu Oct 10, 2002 11:18 pm

There seem to be misconceptions here as to the motivation for AI's fleet requirements. There is absolutely no intent to run nonstops India-US in the foreseeable future except as a competitive response or unless forced to by market conditions. Unfortunately, the sad reality is that there are a limited number of European gateways from which AI can sustain a viable operation India-Europe-US with fifth freedom rights. The current routing through LHR is wonderfully profitable and there are high hopes for the EWR routing through CDG as well. However, as AI expands their North American routes, eventually they will reach a point of saturation for the trans-atlantic fifth freedom traffic. At that point, and not before, India-US nonstop becomes a viable commercial operation. Until then, it is far more lucrative and efficient to run through a European gateway.
 
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RE: Air India Update

Thu Oct 10, 2002 11:29 pm

Good point. My discussion of the B777 versus assorted Airbus widebodies was an aircraft capability discussion. Since AI needs to do US-India with a European routing, there really is no need for the A345 or 772LR. Apparently these aircraft are being considered anyway which seems to indicate that AI wants to have US-India non-stop capability.

United was going to operate ORD-DEL-ORD non stop about three years ago. That fell apart because of ALPA issues initially.
 
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RE: Air India Update

Thu Oct 10, 2002 11:51 pm

Since AI needs to do US-India with a European routing, there really is no need for the A345 or 772LR. Apparently these aircraft are being considered anyway which seems to indicate that AI wants to have US-India non-stop capability.

The specific requirements laid out by the board were for 17 aircraft, 9 of which are required to run India-Europe-US and the other 8 should have the ability to run India-US nonstop IF REQUIRED. That is simply a hedge bet on the lack of slots/rights opening up for additional 5th freedoms ex-Europe. As long as there is a choice, AI will prefer to run one-stop flights. However, if buying new aircraft, it would make sense to purchase variants CAPABLE of doing nonstops.
 
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RE: Air India Update

Fri Oct 11, 2002 3:54 am

Do you think they might option those ultra-long range aircraft (777LR/345) and firm-order the standard long range aircraft? Or perhaps firm order 17 777s or 340s with the option of changing the variants?
 
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RE: Air India Update

Fri Oct 11, 2002 4:14 am

N79969 - I try not to speculate on what they might do and restrict my postings to facts. I will reproduce what I said on another thread.

Based on information from various sources, I think the commonality issue will be a very important selling point here. Boeing is likely to offer a package of 777s (-200ER, -200LR and -300ER) along with a 767-200 with a 777 flight deck and common rating in the 150-200 seat category. There is also the possibility of additional 744 orders. Airbus is likely to offer a package of A340s (-500 and -600) for the longhauls, but may suffer because of a lack of common-rating option for the 150-200 seat category. The only Airbus products in that range are the A321, which has the disadvantage of being a narrowbody on Air India's highly freight-sensitive network, and the A330-200 which is about 50 seats too large. Right now, the advantage is definitely in Boeing's court, but there is a long road ahead before any concrete moves are made.

Roy - On re-reading what I posted earlier, I realize I wasnt very clear about the secondary markets issue. Yes, AI does intend to use the 150-200 seat category aircraft to feed secondary markets, but the ones you listed are more like tertiary markets. IMHO primary comprises BOM, DEL, MAA; Secondary comprises BLR, HYD, TRV, COK, CCU, AMD, GOI; Tertiary includes the rest like CCJ, CJB, TRZ, GAU, etc...
 
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RE: Air India Update

Fri Oct 11, 2002 4:20 am

Thanks for re-posting that. I remember reading it now. Some of the best posts I read here are educated guesses. (i.e. speculation)
 
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RE: Air India Update

Fri Oct 11, 2002 4:46 am

Some of the best posts I read here are educated guesses. (i.e. speculation)

Some of the stupidest ones I read here are also speculation. Hence my attempt to stick to the facts. I'll try to post less though if you would rather see speculative guesses.
 
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RE: Air India Update

Fri Oct 11, 2002 7:35 pm



Also, I believe that IC's initial switch away from 757s to A320 was based on French "gifts" being distributed. Bribes are (were) tax-deductible as business expenses in France.


You “believe” that the A320 purchase by IC in the 1980’s was based on bribes being given? Wonder why you don’t think the same about IC’s purchase of 737-200’s in the 70’s? Or Ai’s purchase of 747-200’s in the late 60’s, 747-300 Combis in the ‘80’s and 747-400’s in the late 80’s/early 90’s? I wonder why u brought that in? What are you trying to say? That Boeing doesn’t pay bribes? SQ switched midway to 777’s instead of A340’s. According to one Pakistani web-zine, Gen.Musharrafs nephew is said to have recd “incentives” so PIA chooses 777’s instead of A340’s. But that is because Boeing makes better aircraft! Yeah right!!

The problem seems to be that Americans are very bad losers. A similar excuse was bandied about when Boeing lost out to Airbus for their 707 replacement requirement. AI opted for A310’s instead of 767-200’s, and even then it was alleged that bribes changed hands. I didn’t hear such things when the 747-400’s entered AI’s fleet?

American companies have also famously been involved in bribery scandals across the third world. That’s one problem of third-world countries with centralized licensing procedures, purchasing big-ticket items like aircraft: Bribes are inevitably part of almost every deal including those involving Boeing. So don’t adopt this holier than thou attitude here.

Its funny that you talk of the A320 deal, because that is regarded here as one of those rare deals which were relatively clean.

Apart from bribes, there can be other reasons that make a deal attractive. Airbus has sub-contracted a large amount of work for the A330/340 aircraft (like doors, cargo bay eqpt. etc) to Hindustan Aeronautics. And with Franco-Indian friendship at an all time high, even more is coming in! At one time, there was even talk of transferring the now defunct A300 line to HAL-Bangalore to manufacture freighters. This shows the level of co-operation between Airbus and Indian firms which results in advantages to both parties. It creates jobs within India and improves India’s own aircraft manufacture capabilities. Boeing has nothing of that sort to offer India. Instead of a partnership, it only wants a imperialist, buyer-seller relationship with limited advantages for India.

For the airline concerned also, the A330/340 line offers the advantage of commonality. The importance of the family concept that Airbus is promoting must not be underestimated. IC is now reaping the benefit. It can operate a fleet of aircraft with capacities between 108 (A319), 144(A320) to 167(A321) with the same set of crew and similar maintainance and engg. Procedures. The A320’s with V2500’s is cheaper to operate (though it is said to be a “dog” to maintain). According to some sources, the savings for IC are in the range of 15-25% as compared to 757’s! Imagine if IC had gone in for the 757-200’s then! IC would have to operate a mix of 737-600’s, 800’s and 757s with different sets of crew and operational procedures!

-Roy

 
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RE: Air India Update

Fri Oct 11, 2002 10:58 pm

Roy,

Sorry you took such offense to something I have read and repeated. I do believe that Airbus can and does bribe local officials as necessary. When Air Canada went with Airbus, (PM) Brian Mulroney was implicated in a bribery scandal. By allowing bribes to be written off, French law in effect encouraged the practice. In fact many African leaders have complained that this provision of French law/business practice was feeding their corruption problems. I don't know if Airbus still conducts business this way but I dont' doubt it.

I do doubt that Boeing directly bribes officials. There is a pretty-strictly enforced law called the Foreign Corrupt Practices Act. Basically if a Boeing employee bribes a Chinese official, the Boeing employee will be sent to prison regardless of whatever happends to the Chinese official. The point is that there is tremendous disincentive for Boeing to attempt those tactics. Of course, some US companies have paid bribes and some probably still do. Lockheed bribed Japanese PM Tanaka in the 1970s in exchange for a L1011 purchase for ANA. PM Tanaka was scandalized and removed from office. I do not know what happened to Lockheed. I just doubt that Boeing would take such risks.

The reason that AI has 742, 743, and 744 is that for 30 years this aircraft was in its own class without rival. It is a good plane and AI can fill the seats. Airbus had nothing to sell in this class.

As far as SQ switching away from 343 to 772ER is well-publicized story. Boeing is buying their 343 fleet including undelivered airplanes as part of the deal. SQ and some other customers were not happy with the 343s climb performance. Boeing made an offer that was hard to refuse.

The 777 provides better commonality than a mix of 330/340. With the 777, you can get one engine type, one type rating. With the 330/340 you have to get at least two engine types (or you could go all Trent with the 345/346).

Finally, I doubt the veracity of this Pakistani 'web-zine.' Everything the US does is somehow viewed as a conspiracy against Muslims in much of Pakistan. If PIA had went all Airbus, I would not be surprised to see something saying that the US blocked the sale to somehow screw Pakistan from competing with the best airliners. You get my drift.

By the way, the A300 line is not defunct. They are delivering A300Fs to UPS and 300-600R (like 2 or 3) to JAS. I would bet money that Airbus just said that it would transfer a manufacturing line with no intention of doing so. Besides the expense, the Europeans fight among themselves over the share of work performed in their own countries.

Boeing subcontracts all over China, Japan, Korea, and Europe. They probably have Indian suppliers but not as many (or as major as Airbus).



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