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Posted on 03/04/2006 2:36:44 PM PST by Paleo Conservative
Aviation giant Boeing (NYSE:BA - news) said on Friday it hoped to win a $3 billion contract to deliver 22 new long-haul planes to Russia's flag carrier Aeroflot, even if its rival Airbus (EAD.PA) has offered a discount.
The tender pits Boeing's latest B-787 "Dreamliner" jets against Airbus A-350 aircraft, and Russian media have speculated that Airbus offered Aeroflot (AFLT.RTS) a $100 million discount to win the contract.
Senior Airbus officials have called their bid "unique," but declined to say if they really offered a discount.
Craig Jones, a Boeing vice-president in charge of sales in Russia and the CIS, said the U.S. plane maker relied primarily on the "high value" of its B-787, 50 percent made of lighter and more resistant composite materials, to win an edge over Airbus.
"First, when we talk about a $100 million (discount) on 20-plus airplanes, it's not a huge percentage change in pricing," Jones told a presentation.
"The second factor is, maybe they (Airbus) realized the first offer was not good enough, or they just basically confirmed the value of the 787," he said with a smile.
Jones said Boeing's calculations showed the Dreamliner's economical consumption of fuel and other cost-effective factors meant Aeroflot would eventually be saving about $3.5 million per year on each of the B-787.
"This $100 million discount will go away in about 15 months of operation ... You have to add value to the price too," he said. We are partners with Russia, and we have a superior product, so with that combination I think we have very good chances."
Last month President Vladimir Putin ordered to merge all of Russia's airplane makers into one state-run body, called United Aviation Corporation (UAC), to consolidate the moribund sector.
Boeing said it would stay committed to long-term cooperation with Russia's aviation industry, even if it lost the contract with Aeroflot to Airbus.
Some 1,200 Russian engineers have been involved in the B-787 project, and large metal parts of the plane are produced in Russia and delivered to the United States, said Sergei Kravchenko, Boeing head in Russia and the CIS.
"We hope that UAC will become our reliable and long-term partner and that this partnership will be mutually advantageous," Kravchenko said.
Boeing aircraft make up 81 percent of the foreign jet fleet of the post-Soviet Commonwealth of Independent States, including 76 percent of Russia's 97 foreign-made jets.
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Fuel savings of $3.5M per year on each of 20 planes, or $70M per year. I don't care what discount rate you use, that PV is WAY more than the $100M discount offered by Airbus.
Buy 10 350s and get a 380 for free.
I wonder if Airbus might have offered the 350s at a lower price, and threw in "considerations" from French judges for the Russian gymnasts at the upcoming Summer Olympics.
.
I think Aeroflot will buy the 787 for one reason: they can get the plane a lot sooner than the A350-800. Even now, Airbus is slowing pushing back the entry into service (EIS) date for the A350 as more and more changes are made to the plane in order to better compete against the 787.
It doesn't hurt that the 787 costs millions of dollars per plane per year to operate while the manufacturing cost is lower than the A350. If it were just availability, that were an issue couldn't they buy more Illushins and Tupolevs? Even Russians won't buy Russian built jet airliners anymore due to the poor reliability, inadequate spare parts availability, and high costs compared to Boeing or Airbus aircraft available for the same missions.
Correction
Should be:
It doesn't hurt that the 787 costs millions of dollars per plane per year less to operate while the manufacturing cost is lower than the A350.
But why would any Russian airline need an A380? It isn't a very good freighter for general or high density freight, and it carries too many passengers for their airlines to use. Aeroflot returned their 777-200ER's they were leasing back to the lessors. If they can't fill 777-200 sized plane, why buy a plane that is almost twice as large?
And secret information on how to beat the new drug tests that will be introduced just before the 2008 Olympics.
Airbus pushing back the A350 entry date = we can't reverse engineer the 787 design & technology fast enough to create our cheap knockoff on the original date because the majority of our engineers are trying to figure out how to make the A380 several tons lighter.
LOL!
Plus it's all politics. Hate to see the Moscow Design Center leave the country for lack of work.
787-ski .....
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