A Travel and vacations forum. TravelBanter

If this is your first visit, be sure to check out the FAQ by clicking the link above. You may have to register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below.

Go Back   Home » TravelBanter forum » Travelling Style » Air travel
Site Map Home Authors List Search Today's Posts Mark Forums Read Web Partners

Dogfight Over India: Airbus and Boeing are going all out to win billions in plane orders from the nation's booming airlines



 
 
Thread Tools Display Modes
  #1  
Old April 22nd, 2005, 08:53 PM
Siva
external usenet poster
 
Posts: n/a
Default Dogfight Over India: Airbus and Boeing are going all out to win billions in plane orders from the nation's booming airlines

Airbus and Boeing are going all out to win billions in plane orders
from the nation's booming airlines

A year ago, G.R. Gopinath was not getting what he wanted from aircraft
manufacturers Airbus and Boeing Co. (BA ) As founder of India's first
discount carrier, Air Deccan, Gopinath needed planes, but he didn't win
much attention from the two majors. So he settled for a pair of
turboprops from France's ATR to prove he could profitably operate an
airline. When his first short-hop flights proved successful, Gopinath
leased two Airbus A320s for a longer, Bangalore-to-New Delhi flight.
"First I had to sell India to them, and then the fact that I could pull
off a discount airline," recalls Gopinath.


A lot has changed since then. Air Deccan has been a huge success, with
90% of its seats occupied on 106 flights daily serving 32 destinations.
Last month, Gopinath ordered 30 A320s -- worth $1.9 billion before
discounts -- from Airbus. And Airbus can't do enough to support his
young airline. Three Airbus employees -- experts in logistics, pilot
training, and engineering support -- are now stationed at Air Deccan's
Bangalore offices. In January, when a plane was damaged while being
towed, Airbus sent a team of engineers the very next day to set things
right. "They're bending over backward to support me," says Gopinath.

Boeing and Airbus are taking Indian airlines -- even startups -- far
more seriously these days. "Air Deccan's success changed everyone's
mindset," says Kapil Kaul, India country head for the Center for Asia
Pacific Aviation, a consulting firm. The country's air travel market is
growing 25% annually, spurring the two manufacturers to redouble their
efforts to win new business. With the number of passengers in the
country expected to grow from 19 million annually now to 50 million by
2010, a dozen groups are planning to launch service by this time next
year. All told, Indian airlines are expected to buy at least 280 new
planes by 2010, worth an estimated $15 billion, and another $15 billion
worth in the following decade. "India is the hottest growth market on
the planet," says Richard Aboulafia, an analyst with Teal Group, an
aerospace consultancy in Fairfax, Va.

The two majors have been present in India for years, but until recently
have had little to show for it. The most excitement that Airbus had
seen there was in 1986, when state-owned domestic carrier Indian
Airlines ordered 19 A320s. In 1994, Boeing agreed to sell 20 short-haul
737 aircraft to private Jet Airways. For the past decade, Boeing has
been awaiting a decision by state-owned international carrier Air India
to buy new widebodies -- a ruling delayed by successive governments. As
recently as last year, the company was expecting Indian carriers to buy
about $25 billion worth of jets over 20 years. In February, it upped
that estimate to $35 billion. "India was a sleeping giant, and it has
awakened," says Dinesh Keskar, Boeing's top salesman for India. "New
low-cost carriers are emerging that have significantly increased demand
for new airplanes."

LAVISH COURTSHIP
The newfound dynamism in India is largely due to Praful Patel, the
Civil Aviation Minister who took office a year ago. In his first week,
he announced he would push ahead with a partial privatization of the
dismal airports in Delhi and Bombay. The next week he boosted the
ceiling for foreign institutional investment in Indian airlines from
40% to 49% and later permitted private domestic carriers to serve
international destinations. That spurred even sleepy Air India and
Indian Airlines to expand. Together they're planning to spend $10
billion on 110 new aircraft, and both are spinning off discount
carriers of their own. Then on Apr. 14, Patel signed an "open skies"
pact with the U.S., allowing airlines from each country unrestricted
access to the other's market. That same week he inked agreements that
will boost flights to Britain, China, and Qatar.

The potential growth has Boeing and Airbus licking their chops. Even
before some airlines have gotten approval from New Delhi to operate,
their promoters and managers are being courted by the two
manufacturers. Dinner meetings at posh restaurants, sales calls every
other day, and on-the-house invitations to both Toulouse and Seattle
have been extended -- a far cry from last year, when Air Deccan's chief
had to pay his own way to Airbus headquarters in France. "Right now,
they are both hyperactive," says the project manager of a new airline
who is watching the proceedings with amusement.

So far, Boeing is in the lead. About 80 of India's 180 commercial
aircraft are Boeings. Flag carrier Air India has mostly flown Boeing
aircraft for decades, as has private player Jet Airways since it began
in 1993. But there has been a "flurry of deals in the past six months,"
says Keskar. Boeing has won about $1 billion in fresh orders: At least
30 planes from Jet Airways and newbie discounter SpiceJet, which plans
to launch in May. The big prize is likely to come in early May, when
Air India is expected to agree to an $8 billion deal for 50 new
widebodies from Boeing, including the company's latest offering, the
long-haul 787.

Airbus has not exactly been a slouch. The company has $2.6 billion in
firm orders for 43 of its A319 and A320 short-haul jets from Deccan Air
and Kingfisher Airlines, which begins flying domestically on May 9. It
also has a commitment from Indian Airlines to buy 43 more A320s worth
$2.7 billion. But so far, Airbus has found no takers in India for its
newest plane, the double-decker A380.

The courtship is extravagant. As in most other markets, the aircraft
manufacturers are offering discounts of 30% to 50% off the list price
for their planes. Then there's free training for pilots and engineers,
free spare parts for newly purchased planes, and free maintenance
manuals. When a deal is close to being signed, airline executives say
they receive calls from Airbus or Boeing every hour. "Boeing and Airbus
are fighting tooth and nail to get orders in India," says Amitabh
Malhotra, an aviation expert at investment bank N.M. Rothschild India
in Bombay.

That's why the two companies need all the help they can get -- and
they're not shy about asking for it. The U.S. government is pressuring
India to buy Boeing planes, with President George W. Bush,
Transportation Secretary Norman Y. Mineta, and Secretary of State
Condoleezza Rice all lobbying the Indian government on the company's
behalf. Airbus, usually the master of political influence, enlisted
France's Trade and Foreign Affairs Ministers to talk the company up in
India late last year. Presidential help. Lavish parties. Deep
discounts. India's airlines aren't being ignored anymore.

Source:
http://www.businessweek.com/magazine...61.htm?chan=gb

 




Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is Off
HTML code is Off
Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Another Boeing V Airbus Siva Air travel 13 April 3rd, 2005 11:57 AM
Look out Boeing, here comes Bombardier Siva Air travel 7 April 1st, 2005 11:07 AM
Another Boeing V Airbus Siva Air travel 0 March 30th, 2005 02:03 AM
WSJ: On Its Giant Plane, Airbus Tests Exits sufaud Air travel 0 March 22nd, 2005 09:17 PM
Who will win: Boeing or Airbus? Siva Air travel 0 March 17th, 2005 03:58 PM


All times are GMT +1. The time now is 03:38 AM.


Powered by vBulletin® Version 3.6.4
Copyright ©2000 - 2024, Jelsoft Enterprises Ltd.
Copyright 2004-2024 TravelBanter.
The comments are property of their posters.