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    Diplomatic row over purchase of planes

    Diplomatic row over purchase of planes

    By Aslam Khan

    ISLAMABAD: The government is all set to make a final decision on the acquisition of at least three new passenger aircraft for the Pakistan International Airlines at a cost of $150 million, official sources told The News here on Saturday. Finance Minister Shaukat Aziz will make the final choice of whether to buy Airbus or Boeing on Monday morning, a well-placed source in the Ministry of Finance said.

    "The minister has been forced to take the decision because the board of directors of PIA is split over which of the two types of aircraft to purchase as financial credibility of the airline is at stake," the source said. He said that for sometime now, the top brass of PIA has been evaluating the merits between the Boeing 777-200ER and Airbus A340-300 for induction to make the national carrier a more economic, vibrant and internationally competitive airline.

    "At the heart of the dispute among the board of directors is the price of the two types of aircraft. For the same price, PIA can get either three Boeings or four Airbuses," the source told The News. After in-depth studies, PIA set up the Aircraft Acquisition Committee, which was given the task of visiting the headquarters of Boeing, a United States product, and Airbus, a joint European maker, for detailed discussions and negotiations.

    "After the committee visited the headquarters of both the aircraft makers, it faced a dilemma of choice because the specifications of both aircraft were virtually the same while their prices varied greatly," the PIA official said."The cost of an A340-300 is around 30 per cent lower than that of a Boeing 777-200ER," the official said. "In the context of the projected sale of four aircraft initially, it would save Pakistan about $120 million, which is a tremendous financial advantage," he added.

    When contacted, a well-placed official of the Civil Aviation Authority told The News that the figure was correct. "If PIA were in the league of Emirates, Singapore Airlines or Cathay Pacific, the amount of $120 million would probably not matter," he said. "However, having been deeply in the red for almost a decade and just beginning to show signs of improving its financial position, it would be catastrophic to burden PIA with this huge amount which will surely take a heavy toll on its financial credibility," he added.

    A high-ranking PIA official revealed that the plan to purchase the aircraft had sparked frantic behind-the-scenes diplomatic activity by the Americans and Europeans in Islamabad, making a decision by the board of directors of PIA more difficult. "Several US senators and congressmen have written to both the PIA and the ministries of finance and foreign affairs to buy the Boeing 777 while the French foreign minister, who was in Islamabad last week, pushed for the sale of A340-300," he revealed.

    To resolve the matter, a briefing by an evaluation committee of PIA will be given to Finance Minister Shaukat Aziz on Monday to allow him to make a decision between the two types of aircraft, the source said. A member of the board of directors of PIA, when contacted, requesting that he not be named, said that a majority of the members felt that apart from the wide margin in prices, there were some serious matters to consider.

    "For example, a two-engine aircraft will cause PIA a severe logistic problem, should one of its engines have a problem in Islamabad, Lahore or London. The aircraft would be stranded for days before a replacement arrived from the US," he explained. "Another fact we couldn't overlook is that the Pratt & Whitney engine, which is standard on Boeing 777s, has been rejected by a leading airline of Gulf and Asia traffic as being not suitable for our environment," he added.

    According to him, the group in favour of Boeing says that PIA already had experience of handling the American plane, which went in favour of PIA. The detractors, according to the member board of directors, point out that while that might be true, PIA had bad experience of including DC-10 planes from the US which forced PIA into the red because of their heavy price.

    "As opposed to this, the board appreciated the fact that France, where Airbus headquarters in situated, has stood by Pakistan through thick and thin. The latest example is that even though 12 of their engineers were killed recently in Karachi, they continued to work on the Agosta submarine project - a gesture Pakistan can never forget," he added. http://www.jang.com.pk/thenews/aug20...2/metro/i3.htm
    Well either one is good, boeing or airbus.

    #2
    Well after reading the article it seems that Airbus A300-340, seems to be much better than the Boeing. Also the fact that the French government did'nt abandon us when 12 of their men were killed in Pakistan by some stupid so called Muslims.
    Unity, Faith & Discipline....
    --Jinnah

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      #3
      Well seems to me that PIA would opt for the A343 and not the 772. Considering that France has always been faithful to us unlike uncle sam, I would also favour the A343. Anyway, whichever aircraft they get in the end, it would be a win-win situation as both aircraft are excellent. I tend to disagree with the argument that the 777-200 engines are not suitable for our environment. Emirates flys a considerable number of 777s and same goes with Kuwait Airways. Both countries have a harsh climate. If pratt and whitney engines are not suitable then PIA can go with the Rolls Royce Trent 890 engines which Emirates 777s have or the General Electric GE90-90B engines standard on Kuwaiti 777s.

      [This message has been edited by Astronut (edited August 11, 2002).]

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        #4
        From a layman's perspective, doesn't it make more sense for PIA to try to stick to one brand, so that its maintenance costs are more under-control, and they don't have to retrain their pilots and mechanics to different designs.

        And, more importantly, the price difference is huge. The US congressmen should try to get PIA lower prices, instead of arm-twisting us, by their lobbying, to go for more expensive planes. This sort of sheer arrogance is so frustrating.
        "Let your friends underestimate your virtues. Let your enemies overestimate your faults." - Godfather.

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