AIRBUS WOOS AIR MAD, BUT BOEING PITCH REQUESTED

UNCLAS ANTANANARIVO 001413 SIPDIS SENSITIVE SIPDIS PARIS FOR D'ELIA DEPT FOR AF/E MBEYZEROV DEPT FOR INR/I, EB/TRA AND EB/CBA JOHANNESBURG FOR FCS E.O. 12958: N/A TAGS: EAIR BEXP ECON EFIN PREL MA SUBJECT: AIRBUS WOOS AIR MAD, BUT BOEING PITCH REQUESTED Ref: A) STATE 171747 B) ANTANANARIVO 177 ¶1. (U) This cable contains an Action Request for the Department in para 5. ¶2. (SBU) National carrier Air Madagascar, 80 percent owned by the Government of Madagascar and privately managed by Lufthansa Consulting, is considering a switch to Airbus equipment from Boeing when it renews its fleet. Air Mad Director General Ulrich Link told PolEcon Chief December 18 he was being aggressively wooed by Airbus with everything from weekend vacations to financing and assistance with technology migration costs. Air Mad, which had followed Air France's lead to use Boeing equipment in the past, will make a procurement decision by March 2007. ¶3. (SBU) DG Link said Air Mad's four long haul carriers for its Paris and Bangkok routes are all due to be replaced in the coming two years. Currently Air Mad operates four aircraft under leases from GE's finance arm: two 767s to be replaced in March 2008 and June 2009 as well as two 737s both due to be replaced in December ¶2008. Given a 50 percent price increase quoted by the lessor GE, DG Link and Air Mad Finance Director Arthur Randrianambinintsoa decided to explore acquisition opportunities. In addition to Air Mad's long haul fleet, DG Link is considering bundling the purchase with acquisitions of smaller aircraft to replace some ATRs and Twin Otters which are workhorses for the airline's many domestic routes. ¶4. (SBU) DG Link was a bit puzzled by the aggressive sale put on by Airbus, guessing perhaps the relatively small Air Mad deal might be part of some regional strategy. A long-time employee of Lufthansa, DG Link expressed pure indifference between Airbus and Boeing based on performance and quality: his decision would be based on price. He emphasized that Airbus had already made attractive financing offers for the new fleet acquisition and offered to cover some of the migration costs and new training required to change equipment. Since his arrival at Air Madagascar six months ago, DG Link said he has had no contact from Boeing. ¶5. (SBU) ACTION REQUESTED: Post requests the Department pass along this information to Boeing and, if desired, facilitate a sales representative mission to Madagascar as early as possible in 2007. The Ambassador would personally participate in Boeing's visit if the company wishes to make an offer for Air Madagascar's fleet renewal. MCGEE