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Home > Business > Business Headline > Report

Boeing offers buyback in bid for A-I deal

Narayanan Madhavan in Bangalore | February 08, 2003 12:45 IST

Boeing Corp said on Friday it has offered to buy back five used passenger planes from Air-India as part of a pitch to sell 10 long-range jets to the state-run international carrier.

The US giant also said it offered unspecified price cuts to get back into the running for another contract it lost last March when domestic carrier Indian Airlines opted to buy 43 short-range planes from Europe's Airbus.

Boeing wants to sell 10 long-range 777 jets to Air-India in a deal estimated at $1.7 billion, sales senior vice-president Dinesh Keskar told a news conference at a Bangalore air show.

"We'll take back their 747-300s and 200s because they're no longer needed", and Boeing could use them in a used plane business. He gave no value for the three 747-200s and two 747-300s that Boeing had offered to take back.

Air-India, which has around 30 planes, has opened bids for firm orders for 10 long-haul 250-seat aircraft and an option to buy seven in a deal Boeing estimated would be worth $1.9 billion.

Boeing's 777-200s are pitted against Airbus A340-300s in the first phase of the long-range order of planes.

Keskar said technical and financial bids have been submitted for the long-range deal and technical bids have been opened.

Air-India has singled out the Airbus A-321 and Boeing 737-900 for a short-range order of 160-seater planes to cover such destinations as the Middle East and South East Asia.

The international airline plans to acquire the long-range aircraft over five years starting in April 2003 to cover destinations in Europe and the United States.

"It's one of the biggest deals and campaigns anywhere in the world," Keskar said of Air-India's plan. "We're not only working hard and capable, but we feel we have the right products."

India, the second-most populous nation, has more than 20 million expatriates and Boeing estimates two-way travel in and out of India will grow by 6.3 percent annually until 2021.

Keskar said Boeing last July offered to cut its prices to woo Indian Airlines but did not say by how much. It made the fresh bid after the domestic carrier's board approved last March the purchase of 43 Airbus A319s, A320s and A321s in a deal worth an estimated $2.1 billion.

"We're willing to work with Indian Airlines," he said, saying a global downturn in aviation following the September 2001 attacks in the United States drove the price cut. "Pricing is anywhere 10 to 20 per cent below what it was," he said.

French Prime Minister Jean-Pierre Raffarin, on a three-day visit to India, pressed the Indian government on Thursday for fast approval of the Airbus order by Indian Airlines.

No timeframe has been set for a decision by the Indian cabinet on the deal. But French Finance Minister Francis Mer, who accompanied Raffarin, said "without being finalised, the (Airbus) deal is looking increasingly certain".

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Number of User Comments: 5


It is necessary that AI/IA go in for replacement of aged fleet in a massive manner. Government should first of all decide whether we need ...


Sub: RE:On merits and for the good of the India Boeing is my choice.

It's true.But read "The US giant also said it offered unspecified price cuts to get back into the running for another contract it lost last ...

Posted by Indian

Sub: On merits and for the good of the India Boeing is my choice.

It is great that the French PM is making his rounds. Awarding the contract to Boeing will catapault the bourgening Indo-US realtions and will have ...

Posted by Navin

Sub: AI-IA 's Boeing or AIrbus deal

IA, AI should go for Boeing because to Strength the US economy which will have ripple effect on the World economy. How Europe is contributing ...

Posted by Venu

Sub: Govt of India should fund equity

It is nice to note that the airlines (AI+IA) are planning big purchase deals. But the question is how will they fund these? Is the ...

Posted by Ganesh Kumar



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