CAL AIRCRAFT PURCHASES ON HOLD

C O N F I D E N T I A L TAIPEI 000996

SIPDIS

DEPT FOR EAP/TC, EB/AVP
DEPT PLEASE PASS AIT/W

E.O. 12958: DECL: 03/08/2015
TAGS: EAIR BEXP ECON TW
SUBJECT: CAL AIRCRAFT PURCHASES ON HOLD

Classified By: AIT Director Douglas H. Paal, Reason 1.5 d


1. (C) Boeing Commercial Sales representatives Paul Fang and
Scott Grimsby met with AIT economic and commercial officers
on February 25 to discuss possible aircraft purchases by
China Airlines (CAL). Boeing representatives asked AIT/T to
inquire discreetly into two questions: whether European trade
offices, specifically the British, had been lobbying the
Taiwan government recently on behalf of Airbus and whether
CAL was on the verge of announcing the purchase of four
A-340-600 aircraft. AIT/T agreed to make some quiet
inquiries.


2. (C) In a courtesy call with Ministry of Transportation and
Communications Vice Minister Oliver Yu on March 7, econoffs
expressed appreciation for Taiwan airlines close relationship
with Boeing. Econoffs noted that our European counterparts
frequently work very actively to promote Airbus sales and
that AIT wanted to be supportive of Boeing's efforts. Yu
indicated that he had no knowledge of any pending
procurement. He also emphasized that airlines in Taiwan
would be free to make aircraft purchase decisions based
purely on business considerations without pressure from the
Taiwan government, the standard formulation, belied by
government control of 70 percent of CAL stock.


3. (C) In a phone call with CAL Vice President Samson Yeh of
the Safety, Security and Compliance Division, econoff asked
what aircraft purchases CAL had pending. Yeh said that
although he participates in discussions on aircraft
purchases, he is not responsible for purchase planning.
Nevertheless, he indicated that in the short term, CAL has
put aircraft purchases on hold. CAL had planned to sell some
aircraft in its fleet but has postponed those plans. He said
that while Boeing and Airbus are in the process of changing
their product lines, for example Boeing's transition from
777s to 787s, CAL is holding off on aircraft purchases as it
evaluates its future plans. He denied rumors that there is
an Airbus purchase in the works.


4. (C) We have updated Boeing on our conversations and will
continue to monitor CAL's plans.
PAAL