News reports out of India give a mixed indication as to whether Boeing’s going to be able to finally close the 68-jet Air India deal — which was announced in April — before year’s end.
On the one hand, India’s cabinet has signed off on the deal, Reuters India reported. http://in.today.reuters.com/news/NewsArticle.aspx?type=businessNews&storyID=2005-12-15T205047Z_01_NOOTR_RTRJONC_0_India-228154-2.xml
Boeing and the government-owned airline have agreed in principal to a deal for 27 787s and 23 777s — including eight -200LR Worldliners — for its long-haul international fleet. Air India also wants 18 737s for a new domestic subsidiary.
Key Quote: “Air-India … desperately needs to expand operations to meet rising competition. Its 33-plane fleet has an average age of 15 years and some aircraft are nearly 25 years old. The carrier, which has been losing market share to international rivals, relies heavily on leased aircraft and its ageing fleet has resulted in lower operating efficiencies, higher costs and inferior passenger satisfaction.”
But on the other hand, The Economic Times reports http://economictimes.indiatimes.com/articleshow/1332900.cms that the government is likely going to seek to renegotiate the sale price.
Key Quote: “The sources added the strategy of re-negotiation isn’t new. The government seems to be inspired by the Indian Airlines (IA) case, where it could save a considerable sum after renegotiating with Airbus for the supply of 43 aircraft.”
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