Identifier
Created
Classification
Origin
08BAKU729
2008-08-05 04:43:00
CONFIDENTIAL
Embassy Baku
Cable title:
BOEING TO SELL ADDITIONAL AIRCRAFT TO AZERBAIJAN
how-toVZCZCXYZ0005 PP RUEHWEB DE RUEHKB #0729 2180443 ZNY CCCCC ZZH P 050443Z AUG 08 FM AMEMBASSY BAKU TO RUEHC/SECSTATE WASHDC PRIORITY 5771 INFO RUCNCIS/CIS COLLECTIVE PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY RULSDMK/DEPT OF TRANSPORTATION WASHDC PRIORITY RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
C O N F I D E N T I A L BAKU 000729
SIPDIS
DEPT PLEASE PASS USTDA FOR DAN STEIN; STATE FOR EEB/TRA;
EMBASSY MOSCOW FOR FAA
E.O. 12958: DECL: 08/03/2018
TAGS: ECON EINT EAIR AZ TX
SUBJECT: BOEING TO SELL ADDITIONAL AIRCRAFT TO AZERBAIJAN
AIRLINES (AZAL)
Classified By: Classified By: Ambassador Anne E. Derse, Reasons 1.4 (b,
d)
C O N F I D E N T I A L BAKU 000729
SIPDIS
DEPT PLEASE PASS USTDA FOR DAN STEIN; STATE FOR EEB/TRA;
EMBASSY MOSCOW FOR FAA
E.O. 12958: DECL: 08/03/2018
TAGS: ECON EINT EAIR AZ TX
SUBJECT: BOEING TO SELL ADDITIONAL AIRCRAFT TO AZERBAIJAN
AIRLINES (AZAL)
Classified By: Classified By: Ambassador Anne E. Derse, Reasons 1.4 (b,
d)
1. (C) SUMMARY: On August 4, Boeing Regional Sales Director
Serdar Gurz, visiting from London, reported a successful
upgrade of Azerbaijan Airlines's (AZAL's) aircraft order from
a total of five aircraft (three 787s and two 737-900s) to a
total of eight aircraft: two 787s, two 767-300ERs, and four
737-900s. Gurz, who had previously briefed the Ambassador on
Boeing's Azerbaijan/AZAL plans, also mentioned that USTDA
assistance would be necessary to guarantee the sale, that the
GOAJ had surprisingly decided to finance the aircraft
purchase with funds from ABN Amro, that AZAL would soon
purchase Georgian state carrier Air Zena (Georgian Airways),
and that AZAL now plans to enter the U.S. market with its
newly purchased 767-300ER. Gurz said a public announcement
of the purchase would be made by AZAL on Wednesday.
2. (U) In a July 25 meeting with the Ambassador, Boeing
Regional Sales Director Serdar Gurz said that he came to
Azerbaijan because Boeing was facing delays in the production
of its new 787 "Dreamliner," and he sought to convince AZAL
to reduce its 787 order so that Boeing could reduce fines it
must pay in late penalties to 787 customers worldwide.
Wanting to make the best of this difficult situation, Gurz
said he planned to offer AZAL two priority time-slots for
deliveries of 767-300ER aircraft, as well as an attractive
price on additional 737-900 aircraft. On August 4, Gurz
called the Embassy to report that he had reached an agreement
with AZAL for two priority deliveries of 767-300ER aircraft
in exchange for AZAL's agreement to drop one of its three 787
orders. These 767-300ERs will be delivered around late 2010
or early 2011; the two remaining 787s are now expected to be
delivered in 2013. Gurz also convinced AZAL to order two
additional 737-900s for delivery in 2011 (in addition the two
previously ordered for delivery in 2010). Gurz mentioned
that one of the 767s would be fitted with a VIP interior at a
modification center in Texas, and would likely become
Azerbaijan's new Presidential aircraft.
3. (U) Gurz mentioned that Boeing had already requested
assistance from USTDA to help AZAL meet the FAA requirements
to fly to the United States. AZAL is already working with a
reputable consulting firm (The Wicks Group) in order to
achieve this goal. Boeing believes that if AZAL were unable
to secure that permission, the sales of these 767s and 787s
could be in jeopardy. Gurz said the first aircraft (a 767)
could potentially be ready for flights to the United States
as early as May 2011 if AZAL can secure the needed FAA
approvals.
4. (C) Gurz said he believes that AZAL will soon purchase
Air Zena (Georgian Airways) because the President of Georgia
asked the President of Azerbaijan to make this happen. Gurz
said that AZAL Chairman Jahangir Asgarov and Azerbaijani
President Ilham Aliyev are very close, and this should
therefore be considered a "done deal." Gurz asked this
information not be transmitted outside USG channels.
5. (C) Gurz said that Boeing had worked hard to secure an
extremely attractive financing package for AZAL: an offer of
LIBOR plus zero percent from Barclays. However, the
Azerbaijani Ministry of Finance had later chosen to accept an
alternate financing package from ABN Amro, citing a long-term
relationship with that bank. Gurz said he did not know the
rate offered by ABN Amro, and that he did not want to know
the specifics of that transaction. He added it was
inconceivable that ABN Amro could have offered a rate
superior to LIBOR.
6. (C) Gurz said that in terms of maintenance and safety,
AZAL compared favorably with other state airlines in Central
Asia. "I have no problem with flying AZAL," Gurz said, but
he expressed reservation about flying with Turkmenistan
Airlines, saying its head was "the nicest guy on Earth, but
he knows nothing about aviation."
DERSE
SIPDIS
DEPT PLEASE PASS USTDA FOR DAN STEIN; STATE FOR EEB/TRA;
EMBASSY MOSCOW FOR FAA
E.O. 12958: DECL: 08/03/2018
TAGS: ECON EINT EAIR AZ TX
SUBJECT: BOEING TO SELL ADDITIONAL AIRCRAFT TO AZERBAIJAN
AIRLINES (AZAL)
Classified By: Classified By: Ambassador Anne E. Derse, Reasons 1.4 (b,
d)
1. (C) SUMMARY: On August 4, Boeing Regional Sales Director
Serdar Gurz, visiting from London, reported a successful
upgrade of Azerbaijan Airlines's (AZAL's) aircraft order from
a total of five aircraft (three 787s and two 737-900s) to a
total of eight aircraft: two 787s, two 767-300ERs, and four
737-900s. Gurz, who had previously briefed the Ambassador on
Boeing's Azerbaijan/AZAL plans, also mentioned that USTDA
assistance would be necessary to guarantee the sale, that the
GOAJ had surprisingly decided to finance the aircraft
purchase with funds from ABN Amro, that AZAL would soon
purchase Georgian state carrier Air Zena (Georgian Airways),
and that AZAL now plans to enter the U.S. market with its
newly purchased 767-300ER. Gurz said a public announcement
of the purchase would be made by AZAL on Wednesday.
2. (U) In a July 25 meeting with the Ambassador, Boeing
Regional Sales Director Serdar Gurz said that he came to
Azerbaijan because Boeing was facing delays in the production
of its new 787 "Dreamliner," and he sought to convince AZAL
to reduce its 787 order so that Boeing could reduce fines it
must pay in late penalties to 787 customers worldwide.
Wanting to make the best of this difficult situation, Gurz
said he planned to offer AZAL two priority time-slots for
deliveries of 767-300ER aircraft, as well as an attractive
price on additional 737-900 aircraft. On August 4, Gurz
called the Embassy to report that he had reached an agreement
with AZAL for two priority deliveries of 767-300ER aircraft
in exchange for AZAL's agreement to drop one of its three 787
orders. These 767-300ERs will be delivered around late 2010
or early 2011; the two remaining 787s are now expected to be
delivered in 2013. Gurz also convinced AZAL to order two
additional 737-900s for delivery in 2011 (in addition the two
previously ordered for delivery in 2010). Gurz mentioned
that one of the 767s would be fitted with a VIP interior at a
modification center in Texas, and would likely become
Azerbaijan's new Presidential aircraft.
3. (U) Gurz mentioned that Boeing had already requested
assistance from USTDA to help AZAL meet the FAA requirements
to fly to the United States. AZAL is already working with a
reputable consulting firm (The Wicks Group) in order to
achieve this goal. Boeing believes that if AZAL were unable
to secure that permission, the sales of these 767s and 787s
could be in jeopardy. Gurz said the first aircraft (a 767)
could potentially be ready for flights to the United States
as early as May 2011 if AZAL can secure the needed FAA
approvals.
4. (C) Gurz said he believes that AZAL will soon purchase
Air Zena (Georgian Airways) because the President of Georgia
asked the President of Azerbaijan to make this happen. Gurz
said that AZAL Chairman Jahangir Asgarov and Azerbaijani
President Ilham Aliyev are very close, and this should
therefore be considered a "done deal." Gurz asked this
information not be transmitted outside USG channels.
5. (C) Gurz said that Boeing had worked hard to secure an
extremely attractive financing package for AZAL: an offer of
LIBOR plus zero percent from Barclays. However, the
Azerbaijani Ministry of Finance had later chosen to accept an
alternate financing package from ABN Amro, citing a long-term
relationship with that bank. Gurz said he did not know the
rate offered by ABN Amro, and that he did not want to know
the specifics of that transaction. He added it was
inconceivable that ABN Amro could have offered a rate
superior to LIBOR.
6. (C) Gurz said that in terms of maintenance and safety,
AZAL compared favorably with other state airlines in Central
Asia. "I have no problem with flying AZAL," Gurz said, but
he expressed reservation about flying with Turkmenistan
Airlines, saying its head was "the nicest guy on Earth, but
he knows nothing about aviation."
DERSE