CAL confirms jet purchases from Airbus and Boeing

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China Airlines, the government-controlled carrier of Taiwan, confirmed Tuesday that it had concluded large contracts to buy jets from both Airbus and Boeing, but said financial weaknesses of other airlines had allowed deep discounts.

China Airlines agreed to buy 10 long-range Boeing 747-400s and 12 medium-range Airbus A330-300s, with options to acquire 6 more of the Airbus A330s, the company said, confirming figures that it had released in October. At list price, the Boeings would be worth US$2 billion and the smaller Airbus planes would be worth US$1.7 billion, or US$2.5 billion if the options are exercised.

But Roger Han,a CAL spokesman said that his company would actually pay considerably less, having bargained aggressively at a time when many other airlines are in financial difficulty and deferring or canceling orders for new aircraft. Part of the discount for China Airlines, Han said, lay in promises by Airbus and Boeing to help the airline dispose of many of its current Airbus and Boeing jets as they are replaced by the new planes.

It is rare for the participants in aircraft deals to talk publicly about the terms. Indeed, Airbus and Boeing have said nothing about the details of the transaction confirmed Tuesday. But the CAL deal comes after considerable wrangling, political as well as commercial, and CAL has had to fight suspicions in Taiwan in particular that it is overpaying for the Boeing jets to help preserve Taiwan's military alliance with the United States.

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RE: CAL confirms jet purchases from Airbus and Boeing

They were going for a all Airbus order until US pressure came in...anyway good too see something for Boeing.

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RE: CAL confirms jet purchases from Airbus and Boeing

Yup,CI wanted to buy all Airbus,however,pressure from the US and the Taiwanese Government,made CI order Boeing also although not the 777 as expected. They have decided to replace some of their B744's with newer B744's.

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RE: CAL confirms jet purchases from Airbus and Boeing

Why do airlines bow to pressure from the US. If Boeing want the business then surely they should cut their prices like the way Airbus has done recently. No airline should be pressured into buying from a particular country. If anything the US should put pressure on Boeing to cut prices.
Just my view nothing against Boeing or Airbus.

Kev

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RE: CAL confirms jet purchases from Airbus and Boeing

[updated:LAST EDITED ON 29-12-02 AT 01:23 PM (GMT)]Selsport69, only in a perfect world would no airline be pressured into buying from a particular country.

What you must remember is that CAL is government owned and Taiwan, where CAL is based, depends on military support from the USA, therefore, the US can have a say in whether CAL buy European or American.

For CAL to buy totally European it seems to be snubbing Boeing and an insult to the US after they provided Taiwan with military cover. So I really can see nothing wrong with the US exerting political pressure to buy American on nations that receive substantial foreign aid and military backup.Is it not right that they should be willing to reinvest money back into the American economy? Noting the amount of money the US gives to them

Political manoeuvrings are definitely a factor in many large export businesses and in the aviation market it is no different.