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Thu, Apr 28, 2005

Was Airbus Slighted In Boeing-Air India Deal?

Airbus Wants A Recount

They're doing the happy dance at Boeing this week, after two major deals with airlines in Canada and India. But across the pond, the atmosphere is completely different -- and a little sour.

At Boeing...

"This is better than we ever could have imagined," Boeing's 787 sales chief Michael Bair, told Indian reporters. "It is hard to put a word on it. Phenomenal, gratified, excited. We are really, really pleased with how this is unfolding."

He has lots of reasons to be pleased. Billions, in fact. With deals pending at not only Air India, but Air Canada and Korean Air, Bair's toughest problem may soon be how to schedule delivery on all the aircraft he's sold.

At Airbus...

"We are not disappointed but we are astonished by the fact that Air India chose to ignore Airbus completely without even giving us a chance to offer our views," Airbus vice president for sales in South Asia, Nigel Harwood, told the Hindu newspaper. "This is a major deal for us and Air India is a very valued and prestigious airline for us."

Harwood complained openly about an Air India selection process that left his company out in the cold.

"The procedure lacked transparency. We were never allowed to present facts before the Air India board," he told reporters in New Delhi Wednesday night. "The Civil Aviation Minister, Praful Patel, had promised total transparency in the acquisition process but we are shocked that we were not even considered. If this is how Air India plans to purchase planes, why should we even enter the bids?"

Harwood said Air India management didn't even reply to a number of letters he sent regarding both the A380 and the A350 -- the latter designed as a competitor to Boeing's 787.

Robert Milton, CEO of ACE Holdings, which controls Air Canada, said he indeed considered the A350 head-to-head with the 787. But in the end, he said, his decision to go with Boeing was based on his belief that an all composite airframe would truly save money on fuel. And fuel is very big on the minds of airline executives these days.

FMI: www.boeing.com, www.airbus.com

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