Friday, June 1, 2012

Boeing asked to pay for Air India's mistakes and ineptitude

How much does Air India want Boeing to pay for AI's mismanagement and incompetence...$1,000,000,000.00.  That amount is equal to over $37mm per 787.  Now Boeing does owe Air India compensation for the delays but certainly $37mm is waaaay over the top.  What Air India wants Boeing to do is pay for years of bureaucratic mistakes and idiocy at the air line.  They couldn't even effectively merge Air India and Indian Airlines and the result is a huge strike that is financially hurting the airline.  Now Air India want Boeing to pay for the financial costs of the strike.

Air India, of course, has no where to go and at the end they will have to blink.  Boeing can easily deliver these airplanes to another customer though Boeing would have to hold on the the 787s while the BFE (buyer furnished equipment) is delivered to them for installation.  Air India would be without the fuel efficient aircraft it so desperately needs to remain competitive with Emirates, Qatar Airways and other international carriers and it will further hurt their bottom line.  I certainly hope that Boeing doesn't blink.  They shouldn't be held hostage due to Air India's extremely poor decision making.  Here's an Op-Ed from the New York Times regarding the Air India situation:

NYT:  Air India’s Boeing Showdown Could Be a Mistake

In other news, I got wind of the 787s that are in the EMC at Everett.  They are:

Bay C, ZA262, LN49, Ethiopian
Bay B, ZA382, LN43  China Southern
Bay A, ZA380, LN34, China Southern
Bay D, ZA287, LN52, United
Bay AW, ZA178, LN27, JAL

Quite interesting that ZA100, LN 7 is not there anymore.  I don't know where it is hiding but it was at EMC for a good long while.  I have to wonder if it's close to being delivered? Well we all know that there weren't any 787 deliveries in May but it could be setting up for a big June for the 787 program.  There should be 4 787s for ANA and 1 for Qatar that would be delivered this month.  If Boeing and Air India come to an agreement then that is another 3.  I also expect that the first 787 to go from assembly line to flightline would be pulled out in a couple weeks.  ZA135 (LN66) could sneak in under the wire to be delivered to ANA in June though the chances are remote but it would certainly be delivered by end of July.

20 comments:

Michael Lowrey said...

Uresh,

Thanks for update. A couple of questions. First, are you sure that LN 52 is in Bay D of the EMC. Matt Cawby has a picture of it being towed around to the fuel dock yesterday in what looks like a typical aircraft shuffle. Could the aircraft in the EMC instead be LN 53?

Also, you list aircraft in five EMC bays -- two weeks ago, you had aircraft in six EMC bays!(Missing: Bay Z, which held LN 56 on May 14.)

ZA461/LN 58 conducted radio checks today while on the flight line -- so maybe she does her B1 flight next week and then goes to Portland for paint?

I refined my estimate on 747-8 deliveries for the: probably 32 or 33, slight chance it goes as high 35.

Uresh said...

I'm pretty sure about LN 52. My source is very accurate about where these planes are and Matt took that picture yesterday. They had probably moved it into the EMC since then.

As far as LN 58, I'm hearing that this plane might deliver to Qatar as early as the week of June 18th. I should know more next week.

Michael Mohr said...

Ln 7 was pictured outside the emc today on pain field blog

johnv777 said...

Uresh, The location of LN# 7 mystery is solved. Matt just posted a picture of LN#7 parked outside the EMC. Looks like a lot of activity going on with scaffolding under both the wings and the APU getting attention.

johnv777 said...

Uresh, another update for you. Matt published a picture of JAL LN27 in the EMC on May 30. It appears to have engines attached, although they are wrapped in black.

Uresh said...

Yes I saw it but really can't tell if there are engines hanging off of it.

Karel S said...

Here is another shot of LN7 by moonm: http://www.flickr.com/photos/moonm/7317823512/in/photostream/

Karel S said...

Here is another shot of LN7 by moonm: http://www.flickr.com/photos/moonm/7317823512/in/photostream/

johnv777 said...

Uresh, this is the picture I was referring to.
http://paineairport.com/kpae5050.htm

It was posted a few days ago on May 30. I think it does show the engine a little bit more clearly.

United787 said...

What is the EMC?>

Uresh said...

EMC = Everett Modification Center this is where all airplanes before LN 66 will go to be bought up to certification standard prior to delivery.

United787 said...

Thanks Uresh! So if a plane isn't in the EMC, isn't in final assembly and isn't in final preps for delivery, is it probably just sitting waiting to get into the EMC?

Uresh said...

Yup that's about right.

gaga said...

If AI is screwed if Boeing doesn't deliver this fuel efficient aircraft, then I guess they have a very strong case for compensation for not having that aircraft sooner.
I think Boeing will have to pay up, $37million seems accurate and if they don't deliver the bill will be even higher.

Joostdg said...

I think not actually. Sure they will have to pay something. But 37 mil per plane is way too much. It will be closer to 250-300 mil total (around 10 mil per plane). And it isn't Boeing fault that they are in the current financial situation. And Boeing is not going to lose the difference (700 mil) by sitting this dispute out. This kind of stuff is handled in contracts. The only reason it has become a public war is that AI probably wants more then they get on contract basis. Boeing isn’t going to pay more the amount set in the contract plus a small relative bonus for face-saving purposes. Don’t forget AI gets these planes very cheap already. But maybe I’m proven wrong. We will see.

Joostdg said...

Oh and thanks for the great update again Uresh!!!!!!!

Henman said...

Looks like ZA236/LN35 is scheduled for a customer flight today according to Matt Cawby. Also, you can see the rudder is now completely painted from his flightline video posted yesterday. Maybe there's been some progress...

Michael Lowrey said...

Another painted ANA 787 at the fuel dock yesterday in Matt Cawby's flight line video. Would have to be ZA 508/LN 51.

Uresh said...

Yes that is what I suspect though I'm trying to get confirmation on that.

Michael Lowrey said...

Now confirmed via Matt Cawby's twitter that JA811A is at the fuel dock.