Airbus to appeal Air-India choice of Boeings

28th April 2005, Comments 0 comments

NEW DELHI, April 28 (AFP) - European Aircraft giant Airbus Industrie has cried foul over state-run Air India's decision to buy 50 Boeing jets, saying it was denied a chance to show off its new A380 superjumbo, as analysts said politics influenced the decision.

NEW DELHI, April 28 (AFP) - European Aircraft giant Airbus Industrie has cried foul over state-run Air India's decision to buy 50 Boeing jets, saying it was denied a chance to show off its new A380 superjumbo, as analysts said politics influenced the decision.  

Airbus urged the Indian government to order a new tender after Air India approved Tuesday the purchase of up to 50 Boeing planes worth USD 7 billion, the US plane-maker's second big win this week.  

Air India's purchase decision capped a year of high-profile lobbying by Boeing and Airbus executives and politicians from the United States and Europe.  

"We are not disappointed, but astonished. We were not given fair and equal treatment," Harwood Airbus Industrie vice president Nigel Harwood said.  

He said he would write to India's civil aviation ministry seeking reconsideration of Air India's approval of the decision to purchase the craft, including the yet-to-fly B787 Dreamliner, and ask for fresh tenders.  

Purchase of the Dreamliner, Boeing's vision of the next major trend in air travel, is subject to federal government approval.  

"The B787 is still on the drawing board. No one knows its performance capability," Kiran Rao, chief of Airbus Industrie in India, told AFP late Wednesday.  

"Delivery dates for B787 are still unknown. Airbus can't understand why the A380 was ignored when this was the only aircraft that shows profitability on long-range and ultra-long range routes," he added.  

Harwood said Airbus got no chance to make a presentation on its double-decker A380, the world's biggest passenger plane which had its maiden test flight Wednesday near Toulouse, France.  

"We were not given a chance to make a presentation on A380 whereas Boeing made their case on B787s, which will not fly before 2007. That goes contrary to tender conditionalities," the Press Trust of India quoted Harwood as saying.  

"Only Airbus could have delivered all the aircraft in the timeframe" demanded by the state-run carrier in its own tender," Harwood said.  

An Air India spokesman rejected Airbus's statements, saying while Boeing, General Electric and others made presentations, Airbus "at no stage made use of this opportunity."  

Analysts, meanwhile, said the decision may have been influenced by politics as India hopes it will lead to high-technology sales from other US firms and win US support on New Delhi's bid for a seat on the UN Security Council.  

"India has made the United States happy with the Air India contract after it pleased the European Union last year with the Indian Airlines order," said professor Brahma Chellaney of the Centre for Policy Research in New Delhi.  

Chellaney said the deal was part of a strategy to present a picture of healthy India-US relations which have been growing in the last few years.  

"Such huge contracts are decided at the political level and that's what has happened this time too," Chellaney told AFP.  

Air India said it wants to buy eight B777-200 LR, 15 B777-300 ER and 27 B787 Dreamliner medium-capacity, long-range aircraft. Civil Aviation Minister Praful Patel said Tuesday it would trust the company's board on which plane it wants.  

"There will undoubtedly be much speculation as to why Air India chose Boeing over Airbus," said Elizabeth Mills, an analyst with Global Insight in Britain.  

"The government has been keen to distance itself from the deal, arguing it has no involvement with the company, but the links India has with the US in terms of defence and more recently as a result of a new open-skies agreement may have had some impact."  

Mills and Chellaney also noted the choice of Boeing may be an attempt by India to balance relations between Europe and the United States after domestic state-run carrier Indian Airlines gave Airbus the order to supply 43 aircraft.  

An aviation expert, however, said it was the Dreamliner's specifications that tilted the order in favour of Boeing which also won a USD 5 billion wide-body jet order this week from Air Canada.  

Airbus was a strong contender for the Air India order given its capacity to fly around 550 passengers on long-haul flights.  

But the smaller Dreamliner, although two years away from its first flight, "is an exceptional aircraft as it has the latest technology, high passenger comfort and offers great economic value from fuel efficiency," Hormuz P. Mama, editor of International Aerospace Magazine.  

"Air India has taken the right decision to meet its long-term requirements as the Dreamliner will cost less money once you fly it," Mama said. Boeing has said the Dreamliner will help Air-India save USD 300 million annually.  

At the same time, Mama said, "it will also help boost India-US relations."



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