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KarelXWB
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AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 2:09 pm

We are all aware that AI grounded two 787s for spare parts. Reason for this have now been revealed by India’s junior aviation minister:

Quote:
Air India is struggling to pay for spare parts forcing it to ground two Boeing Dreamliners.

The aircraft were not operational for about 10 months each as worldwide demand for parts outpaced supply from Boeing, and Air India failed to procure components on credit due to a “financial crunch”, Mahesh Sharma, India’s junior aviation minister, told parliament Thursday.

In case you'd wonder how costly it is to ground an airliner:

Quote:
While the carrier kept paying rentals of $1 million every month for each of the two planes, it also lost money as they were out of operation, he said.

But there's more: the same minister claims there's a shortage on 787 spare parts:

Quote:
Operators of the Dreamliner across the world are facing problems due to “high rate of failures of components,” said Sharma. And Boeing “could not support the demand of failed units on various 787 aircraft since demand was more than supply.”

Source
http://www.bloomberg.com/news/articl...ilout-fails-to-avert-grounded-787s
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phxa340
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 3:01 pm

Quoting KarelXWB (Thread starter):

That doesn't hold up. If there were a shortage of parts, other airlines would be faced to ground their 787s as well while they waited for said parts.

Also, part failure on the 787 is similar to other types now, in fact some suppliers are starting to "complain" that the predicted reliability is too good and therefore hitting their cash flow because they were expecting to ship additional replacements.
 
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lightsaber
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 3:06 pm

Yet no one else is grounding 787s and dispatch reliability is over 99%.

I think AI is blaming Boeing for their own issues. QR would complain if parts weren't available. Bif parts weren't available, production would not be increasing as it is.

Earlier there were shortages of RR fuel pumps and generators for both engines, but that was solved years ago.


This is AI blaming Boeing for their poor planning.

Some airlines see 99.7% dispatch reliability:

https://www.google.com/url?sa=t&source=web&rct=j&url=http://www.reuters.com/article/2015/11/07/idUSP6N12L00V20151107&ved=0ahUKEwiNnsi2-7_JAhVH6yYKHdJzDGoQqQIIHSgAMAE&usg=AFQjCNFXySa_o8uq8xu6ToxNXo6WAGLaRA&sig2=Ui3AgNeTm2WrBEBe7BynoA



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910A
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 4:35 pm

Quoting lightsaber (Reply 2):
This is AI blaming Boeing for their poor planning.

No it isn't. It states that AI couldn't purchase the parts on credit due to their financial crunch.
 
StrandedAtMKG
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 4:42 pm

Quoting 910A (Reply 3):
No it isn't. It states that AI couldn't purchase the parts on credit due to their financial crunch.

So either it's Boeing's fault for not supplying parts in the first place, or it's AI's fault for not being able to get credit. The article says both, but they can't have it both ways. Since other airlines are having overwhelming success with the dispatch reliability of their 787s, the problem must lie with AI.
 
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IslandRob
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 5:58 pm

Quoting 910A (Reply 3):
No it isn't. It states that AI couldn't purchase the parts on credit due to their financial crunch.

Your assertion is contradicted by this statement from the minister: Operators of the Dreamliner across the world are facing problems due to “high rate of failures of components,” said Sharma. And Boeing “could not support the demand of failed units on various 787 aircraft since demand was more than supply.”

The quote mentions nothing about credit. Clearly, he's taking a multi-pronged approach in making up excuses. Regards. -ir
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clickhappy
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 6:03 pm

Rob - did you actually read the article?

The aircraft were not operational for about 10 months each as worldwide demand for parts outpaced supply from Boeing, and Air India failed to procure components on credit due to a “financial crunch”, Mahesh Sharma, India’s junior aviation minister, told parliament Thursday.
 
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 6:16 pm

Quoting clickhappy (Reply 6):
Rob - did you actually read the article?

Yes, I read the entire article. Did you? Look 2 paragraphs below where you took your quote from, and you'll see that Sharma is putting the blame squarely on Boeing: "Operators of the Dreamliner across the world are facing problems due to 'high rate of failures of components,' said Sharma. And Boeing 'could not support the demand of failed units on various 787 aircraft since demand was more than supply.'”

-ir

[Edited 2015-12-03 10:18:58]
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par13del
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 6:29 pm

Quoting 910A (Reply 3):
No it isn't. It states that AI couldn't purchase the parts on credit due to their financial crunch.

Boeing is at fault on both fronts.
1. The 787 is not reliable as various parts continue to fail
2. AI could not get sufficient credit to purchase spares when available because Boeing had not yet re-authorized its EXIm Bank to which AI has a good credit rating.

What am I missing, its all there  
 
Sooner787
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 6:35 pm

AI is a joke of an airline. There's a reason we never book clients on AI
unless they're the only option available
 
Planesmart
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 7:39 pm

If there is a shortage of parts, it's quite reasonable Boeing will ration supply to it's best / best paying customers. Even if AI complain, A.Net posters and industry insiders would just say look who is complaining.
 
cschleic
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 8:46 pm

A bit of a topic change, but part of the OP....is rental/lease cost of $1 million / month typical for a 787? I would have thought it would be more. Does it escalate over time, etc?
 
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lightsaber
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 8:50 pm

Quoting 910A (Reply 3):

Correct. Other airlines haven't had the issue.

Quoting clickhappy (Reply 6):

I noted the parts that were engine related. There were electrical distribution part in short supply for six months. NOTHING gives AI an excuse for the length of their grounding.

Standard industry guarantees reimburse for the parts and the guarantee labor (usually prorated on part expected life). First the airline must buy the parts, replace the parts, file a guarantee claim, then receive their money 30 days after the parts are received by Boeing. If dispatch reliability is below promise (it was), then Boeing pays the contract specific penalty. Usually in the form of credits for future parts and in some cases aircraft purchases.

No other airline had these level of issues. There were no multi-month part delays with any other operator. Yes, ANA and JL refused deliveries of "terrible teens.". AI has taken a reliability issue and multiplied the consequences.

Boeing cannot help that AI's maintenance processes are that out of line with global standards.

I bet the dispatch reliability of 787s is now above industry standards if AI and maybe one other problem child were excluded.

Quoting Planesmart (Reply 10):

And forfeit GoI defense contracts?   . Boeing probably wouldn't sell on credit due to AI's cash flow issues, but if AI could pay, they would have the parts.

There was never such a shortage of parts to keep any other plane down more than a day or two. You cannot have 99.7% dispatch reliability if parts still have that level of issues.


If AI could only buy parts ExIM, they are in deep trouble. ExIm is for the planes, *not* the maintenance/parts.

AI obviously shorted the spares budget. That is bad planning. Only Norwegian could blame Boeing as there was a two week period even the one Goldcare customer had to wait for fuel pumps. But two weeks multiplied into several aircraft flying years missed?

AI is the airline equivalent of a whiplash victim. Yes they were hurt and deserve some compensation, but this is trying to blame others.

AI had 777s parted too! There has NEVER been a parts shortage on that type. Someone has to explain that to me.

There was a time fuel pumps, generators, and power distribution parts were air-freighted daily and aircraft lost a day here and there of flight time. But that time ended years ago and after a few weeks of hell, it was just Boeing absorbing the express postage.

Then again, AI was at the cash flow point they couldn't forward the postage with a month lead time...

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rta
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 8:50 pm

Wow, AI really do blame anyone they can.
Its always a bit painful and cringe worthy whenever I read something about AI.
 
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seabosdca
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:11 pm

Quoting lightsaber (Reply 12):
Yes, ANA and JL refused deliveries of "terrible teens."

ANA, JAL, Ethiopian, and China Southern are all operating aircraft from the same production block as AI's early builds, and not having any of these issues. Heck, ANA is also operating the first three production frames, from before the terrible teens, and they've never been down for any significant length of time or for more time than other 787s. This is an airline-related problem. Whether Boeing is allocating scarce parts to airlines that pay more reliably, or whether AI can't get financing to pay for the parts at all, the difference is AI.
 
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:16 pm

Remember that Air India's 787's sat in Seattle for a long time before they could afford to pick them up. Are the Indian people not flying? Or just not flying abroad?
 
PanAm1971
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:22 pm

But, at the end of the day, doesn't this all come down to an unhappy customer that is unable to utilize the very expensive aircraft they bought? It may be AI... but none-the-less... this never looks good for the manufacturer.
 
EIDL
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:26 pm

Quoting Beatyair (Reply 15):
Are the Indian people not flying? Or just not flying abroad?

Flying other airlines.
 
winginit
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:33 pm

So by "shortage" what they really meant was "shortage of money with which to pay for said parts", as in, there is a shortage of brand new Lamborghinis available for me to purchase in that none of those available are under $100,000
 
Morvious
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:38 pm

Maybe they should ground one plane, take it appart and use its parts to keep the others flying.. Wait, did this happened before?

AI is just one airliner that needs to be avoided.
have a good day,

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KarelXWB
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:40 pm

Quoting PanAm1971 (Reply 16):
But, at the end of the day, doesn't this all come down to an unhappy customer that is unable to utilize the very expensive aircraft they bought?

You may be right. Earlier this year AI wanted to sue Boeing because the 787 fleet could not make their long haul routes profitable.
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par13del
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:44 pm

Quoting PanAm1971 (Reply 16):
doesn't this all come down to an unhappy customer that is unable to utilize the very expensive aircraft they bought?

Well, if they were one of the early customers the a/c were not that expensive, relatively speaking, plus the compensation may have lowered the price even further.
 
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:45 pm

Quoting PanAm1971 (Reply 16):
But, at the end of the day, doesn't this all come down to an unhappy customer that is unable to utilize the very expensive aircraft they bought?

When it's self-induced, as many in the industry would likely conclude once they see who's doing then whining-- I doubt it will shine negatively at all on the OEM.
I myself, suspect a more prosaic motive... ~Thranduil
 
PanAm1971
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:55 pm

Quoting par13del (Reply 21):
Well, if they were one of the early customers the a/c were not that expensive, relatively speaking, plus the compensation may have lowered the price even further.

While I understand what you are saying... the aircraft are still very expensive. And the drive by the sales team to get the sale can often lead to products being sold to customers the manufacturer knows are not suited for them and/or the customer has a low probability to succeed with. It really undermines the credibility of the manufacturer in the long run... even if we are talking about AI. Boeing would be better off offering to buy back the aircraft and/or work with AI to find a product more suited to their capabilities and cost structure. Just my opinion.
 
747megatop
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:57 pm

I think the title of the thread should be changed to

AI: No Money For Spare Parts, Shortage BUT EXCESS OF PLANES & ENDLESS LINE OF BAILOUT CREDIT FROM THE STATE.
 
PanAm1971
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 9:58 pm

Quoting LAX772LR (Reply 22):
When it's self-induced, as many in the industry would likely conclude once they see who's doing then whining-- I doubt it will shine negatively at all on the OEM.

The industry may well see that. Or they may see a cash flush manufacturer playing hardball with a customer going through a very rough patch. It never looks good.
 
747megatop
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 10:02 pm

Quoting PanAm1971 (Reply 25):
Or they may see a cash flush manufacturer playing hardball with a customer going through a very rough patch. It never looks good.

Does anybody know if the no money and parts shortage problem is limited to just Boeings or it is for the Airbus aircraft in their fleet too? And even for the Boeings, is it for the T7s that they have also OR just limited to their 787s?
 
PanAm1971
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 10:03 pm

Quoting 747megatop (Reply 26):
Does anybody know if the no money and parts shortage problem is limited to just Boeings or it is for the Airbus aircraft in their fleet too?

Good question. I've wondered about this.
 
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thekorean
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 10:04 pm

I wonder even Willie Walsh can salvage AI.
 
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flyingclrs727
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 10:10 pm

Quoting thekorean (Reply 28):
I wonder even Willie Walsh can salvage AI.

Perhaps AI should be put into bankruptcy and liquidated.
 
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seabosdca
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 10:44 pm

Incidentally, we are now on the third grounded aircraft. First it was VT-ANI out for 10 months. Then VT-AND out for 10 months. Now, AND is back in service, but VT-ANH is at BOM and hasn't flown for a month.

I guess they spent all of their money on parts to get VT-ALG back in service so they can lose money flying ULH?

[Edited 2015-12-03 14:47:14]
 
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lightsaber
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RE: AI: No Money For Spare Parts, Shortage

Thu Dec 03, 2015 11:49 pm

Quoting thekorean (Reply 28):

Subsidized companies develop a workforce that believe the subsidies will only increase. AI has "jumped the shark.". It is too late.  
Quoting flyingclrs727 (Reply 29):

Sadly, I must agree. VWhy is the GoI " investing" almost a billion USD with no hope of a return instead of airports, roads, electricity, hospitals, or schools?

Lightsaber

Quoting seabosdca (Reply 30):

  . I'll give AI the benefit of the doubt for another 4 weeks.
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indcwby
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 12:37 am

Quoting Beatyair (Reply 15):
Remember that Air India's 787's sat in Seattle for a long time before they could afford to pick them up. Are the Indian people not flying? Or just not flying abroad?

As someone as described as Indian Decent, my family/relatives/friends usually go with the ME3 based on fares. Sometimes, even willing to pay more not to fly on AI. I've had too many nightmares growing up when we had no choice but go AI.

Favorite was IAH-LHR with CO, LGW - CMB via UL (then known as Air Lanka with their beautiful L-1011 that had fuel/passenger stopover in AUH) then either IA or AI from CMB - COK or TVM for a 30 minute hop.
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tyler81190
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 4:19 am

Quoting Beatyair (Reply 15):
Remember that Air India's 787's sat in Seattle for a long time before they could afford to pick them up. Are the Indian people not flying? Or just not flying abroad?

I have had many passengers (during IROPS) be re-booked onto AI via LHR or another connecting point, and they tell me they would rather wait a day or two and fly anyone other than AI...
 
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 5:56 am

Quoting PanAm1971 (Reply 16):
this never looks good for the manufacturer.

There are only two manufacturers right now who are capable of building planes carriers need. Not only that, there are hundreds of B787's flying daily without problems. All of the world carriers know the manufacturer as well as AI. You really think they are going to say "Boeing is building terrible planes"?

Quoting PanAm1971 (Reply 25):
The industry may well see that. Or they may see a cash flush manufacturer playing hardball with a customer going through a very rough patch. It never looks good.

See above.

Quoting par13del (Reply 8):
Boeing is at fault on both fronts.

  
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jetwet1
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 6:07 am

Hang on, AI doesn't have the cash or credit to buy a part, but they have enough cash/credit to start BOM/SFO ?
 
anshuk
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 6:10 am

To add on to these significant problems, AI also need to sort out a lot of problems. I just tried to do a web check-in for my dad who is currently travelling and the AI website says web check-in can only be accessed through Internet Explorer and Firefox. I have a Macbook so IE is out of the question and I simply don't like Firefox, preferring to use Chrome, which is a fairly well-known broswer. How can an airline not sort out their back-end to support all popular browsers??

Pathetic.
 
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Aesma
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 9:25 am

Quoting PanAm1971 (Reply 23):
While I understand what you are saying... the aircraft are still very expensive. And the drive by the sales team to get the sale can often lead to products being sold to customers the manufacturer knows are not suited for them and/or the customer has a low probability to succeed with. It really undermines the credibility of the manufacturer in the long run... even if we are talking about AI. Boeing would be better off offering to buy back the aircraft and/or work with AI to find a product more suited to their capabilities and cost structure. Just my opinion.

When a manufacturer does that the main risk is financial, as in the customer might never pay for what it ordered.

The 787 in this case is not the problem, AI could not pay for 777 parts either.

AI is a government run airline, and since government in India is extremely dysfunctional, then AI has no hope.

In other countries government-run mainly means the tax payer pays for inefficiencies, but in the case of India it means an astonishing amount of bureaucracy and corruption prevents things like buying spare parts to happen.
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 10:52 am

Quoting Beatyair (Reply 15):
Are the Indian people not flying? Or just not flying abroad?

They are, just on Emirates, Qatar and Etihad.
Keep Discovering
 
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Navigator
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 11:43 am

Quoting phxa340 (Reply 1):
That doesn't hold up. If there were a shortage of parts, other airlines would be faced to ground their 787s as well while they waited for said parts.

That depends on the kind of trouble they are having with those planes. Some parts may be available while other parts are not. So it may not necessarily affect other planes.
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moo
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 11:45 am

Quoting Navigator (Reply 39):
That depends on the kind of trouble they are having with those planes. Some parts may be available while other parts are not. So it may not necessarily affect other planes.

But it seems to be consistently AI that is having the issues that put their aircraft out of action - surely if this was a systemic issue with parts supply, we would be seeing it with other airlines as well...?
 
xdlx
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 12:15 pm

I thought a new plane would be covered with a "waranty" and any replacement parts would be provided?
 
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lightsaber
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 12:23 pm

How do you regulate a subsidized airline? If the DCMA were to find issues with AI's maintenance and fine them, the GoI would just end up having to subsidize them more...

Quoting xdlx (Reply 41):

I thought a new plane would be covered with a "waranty" and any replacement parts would be provided?

See my prior post, the replacement part is reimbursed after the fact. Sometimes the part is refurbished. Due to the costs involved, the parts are always inspected prior to paying the guaranty.

Quoting jetwet1 (Reply 35):
AI doesn't have the cash or credit to buy a part, but they have enough cash/credit to start BOM/SFO ?

AI recently received another subsidy infusion.

Quoting moo (Reply 40):
surely if this was a systemic issue with parts supply, we would be seeing it with other airlines as well...?

  

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moo
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 12:32 pm

Quoting lightsaber (Reply 42):
How do you regulate a subsidized airline? If the DCMA were to find issues with AI's maintenance and fine them, the GoI would just end up having to subsidize them more...

Sometimes it takes external entities to force the regulation - when AI is banned from other countries airspaces, the GoI would have to change something then.
 
Gr8Circle
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 1:05 pm

Quoting lightsaber (Reply 2):
This is AI blaming Boeing for their poor planning.

Please stop blaming AI, the airline, for everything...this is a minister, a politician, making excuses in front of parliament.....I know AI and the GOI are somewhat inseparable, but this person is not an AI employee.....he's a minister and politicians say whatever saves their backsides at that moment....
 
2175301
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 2:07 pm

Actually, I believe AI is correct. There is a shortage of 787's as there are no extra to buy sitting in storage if you need one for spare parts; and AI cannot afford to buy them even if their were spare new 787's available...

 

Of course, someone just might clue AI into the idea that they don't need to purchase completed 787s in order for them to have adequate parts. But, using entire aircrafts as parts is what they do. Boeing should have known that and sold AI up front an extra 30 - 50% 787s, with a few more each year to AI to satisfy their parts requirements...  

Have a great day,
 
ec99
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 2:56 pm

Quoting par13del (Reply 8):
2. AI could not get sufficient credit to purchase spares when available because Boeing had not yet re-authorized its EXIm Bank to which AI has a good credit rating.

This is incorrect. Boeing can't reauthorize the Export-Import bank. That is done by Congress and you get bet Boeing through its lobbyists as well as Sen. Murray and Sen. Graham are fighting for its reauthorization.

There is speculation the bank could be reauthorized in the next few days. I somehow doubt that will solve AIs problems but we will see.
 
2175301
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RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 4:42 pm

Quoting ec99 (Reply 46):
Quoting par13del (Reply 8):2. AI could not get sufficient credit to purchase spares when available because Boeing had not yet re-authorized its EXIm Bank to which AI has a good credit rating.
Quoting ec99 (Reply 46):
This is incorrect. Boeing can't reauthorize the Export-Import bank. That is done by Congress and you get bet Boeing through its lobbyists as well as Sen. Murray and Sen. Graham are fighting for its reauthorization.

There is speculation the bank could be reauthorized in the next few days. I somehow doubt that will solve AIs problems but we will see.

Actually, this has nothing to do with the EXiIM bank, as it was fully authorized when AI was having these issues; and my understanding is that the EXIM bank does not finance spare parts anyway (unless they are full aircraft).

Have a great day,
 
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readytotaxi
Posts: 7325
Joined: Mon Dec 11, 2006 2:09 am

RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 4:57 pm

From all of the above it would seem that AI have 3 problems.

A shortage of money!
A shortage of spare parts!
But no shortage of poor management.  
you don't get a second chance to make a first impression!
Growing older, but not up.
 
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par13del
Posts: 10261
Joined: Sun Dec 18, 2005 9:14 pm

RE: AI: No Money For Spare Parts, Shortage

Fri Dec 04, 2015 5:14 pm

Quoting ec99 (Reply 46):
This is incorrect. Boeing can't reauthorize the Export-Import bank.

Do not let facts get in the way of a good story, everyone knows Boeing and the ExIm Bank are one and the same  

On a serious note, the authorization is in a bill before the Congress and is expected to pass, I think it is in the HIghway funding bill.

To continue, DL will not be happy if it passes.

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