JORDAN: ROYAL JORDANIAN SEEKS TO DELAY AIRPLANE

C O N F I D E N T I A L AMMAN 006022 SIPDIS USDOC FOR ADVOCACY CENTER - CHRISTOPHER JAMES USDOC/4520/ITA/MAC/ONE/COBERG EXIMBANK FOR ROBERT MORIN TDA FOR HENRY STEINGASS E.O. 12958: DECL: 10/16/2007 TAGS: BEXP EFIN EAIR JO SUBJECT: JORDAN: ROYAL JORDANIAN SEEKS TO DELAY AIRPLANE DECISION Classified By: Ambassador Edward W. Gnehm. Reasons 1.5 (b) and (d). ¶1. (c) Samir Hanna, the Boeing VP who has been negotiating the sale/lease package of nine 737's to Royal Jordanian Airlines (RJ),reported that RJ CEO Samer al-Majali told him October 16 that RJ was not able to make a decision between competing Boeing and Airbus offers, as had been planned for the first part of this month. Majali asked Boeing to extend the validity of their current offers and said he was asking Airbus to do the same. Hanna is currently checking with his headquarters to if this can be done and for how long. ¶2. (c) Majali told Hanna that the decision not to make a decision was reached on the advice of the Jordanian "government" (presumably the Prime Minister and key ministers). Majali said the government's advice had been told to "hold off until we see what happens with Iraq." This advice was discussed by the RJ Board on October 15. ¶3. (c) According to Hanna's and local Boeing consultant Peter Ledger's reconstruction of the sequence of probable events, such advice most likely came from the government within the past five days, give or take a day or two. The board had previously held an informal review of Boeing and Airbus offers on or about October 2 and Majali briefed King Abdullah on the state of play shortly thereafter. Hanna and Ledger had received positive, but noncommittal signals following the first Board meeting. ¶4. (c) Comment: While they appreciate the uncertainties the Jordanians may be feeling over Iraq, Hanna and Ledger said that a delay could only work to the disadvantage of Boeing. They said that if RJ's hope was to lease aircraft on the market instead of making a decision, RJ could find this more difficult than it might expect given what they said was RJ's poor payments track record with leasing companies. Furthermore, leasing companies would not be able to provide support packages equivalent to that being offered by Boeing. ¶5. (c) Comment continued: The Ambassador will raise this matter directly with the King on October 20. Based on that conversation, we will make appropriate recommendations on next actions. GNEHM