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IdentifierCreatedClassificationOrigin
09MUSCAT166 2009-03-04 12:32:00 CONFIDENTIAL Embassy Muscat
Cable title:  

WITH BOEIN 787s DELAYED, OMAN AIR SEEKS OPTIONS; AIRBUS,

Tags:   EAIR ECON MU 
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VZCZCXRO4777
RR RUEHDE
DE RUEHMS #0166 0631232
ZNY CCCCC ZZH
R 041232Z MAR 09
FM AMEMBASSY MUSCAT
TO RUEHC/SECSTATE WASHINGTON DC
INFO GULF COOPERATION COUNCIL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHMS/AMEMBASSY MUSCAT
					  C O N F I D E N T I A L MUSCAT 000166 

SIPDIS SIPDIS

E.O. 12958: DECL: 2019-03-04
TAGS: EAIR ECON MU
SUBJECT: WITH BOEIN 787s DELAYED, OMAN AIR SEEKS OPTIONS; AIRBUS,
EMBRAER STATUS

CLASSIFIED BY: Gary A. Grappo, Ambassador; REASON: 1.4(B), (D)



1. (U) This message contains an Action Request. See para. 5.





2. (C) SUMMARY. In a February 24 meeting with the Ambassador, Oman
Air Chairman (and Minister of National Economy) Ahmad bin Abdulnabi
Macki outlined the airline's plans and challenges and appeared to
seek USG assistance in dealing with a lack of aircraft. In
particular, the delay in 787 deliveries has put a crimp in Oman
Air's route expansion plans. Macki also discussed plans to acquire
Airbus and Embraer aircraft. END SUMMARY.





3. (C) DELAYS. Macki reported that Oman Air had made a commitment
to acquire six Boeing 787 aircraft with initial deliveries
beginning in 2012. (Note: According to a September 23, 2007 press
release, Oman signed a MOU with Kuwait lease and finance firm
Alafco for six 787s to be delivered in 2012, 2014 and 2015, making
Oman the second Gulf airline to lease the 787. End Note.)
However, Boeing deliveries have since been delayed with the
earliest deliveries now scheduled for 2015, and even that date may
be in question, lamented Macki. Oman Air "can't wait."





4. (C) COMMITMENTS. Macki said Oman Air is in a bind because it
had committed to extending its route structure based on the leases.
It recently started service, for example, to London and Bangkok.
It is currently flying these routes using old Airbus A310s and
A330s leased from an Indian firm. It also committed to introducing
service to Paris and Frankfurt, a commitment Macki said he now
wishes he had not made. The plan was for the 787s to fly all these
new routes eventually. Oman Air was expecting the delivery in 2010
of the last of five A330-200s, but these were not for the new
routes. Therefore, the 787 delay had left a service "gap" between
2010 and 2015.





5. (C) "DISENGAGING." To help close this gap, Oman Air was now
talking to Alafco about "disengaging" from the leases. Macki was
looking for options, but claimed there were no good ones. (Action
Request: Macki was casting about for solutions. If the Department
can engage Boeing to assist either directly or through Alafco,
something may be salvaged of this commitment. End Request.)





6. (C) OTHER PLANS. Aside from the foregoing problem, Macki said
Oman Air was very pleased with its fleet of 12 Boeing 737s. The
company was also looking to acquire regional commercial aircraft
for use at smaller regional airports in the Gulf and the Indian
coast. Oman Air had carefully considered similar Embraer and
Bombardier offerings, coming down on the side of Embraer.
According to Macki, Embraer was "more convenient" having two exit
doors compared to Bomardier's one, etc. He also remarked that
Embraer was "common" in the region, noting its use by Jordan and
Saudi Arabia.





7. (C) THE SULTAN ON OMAN AIR EXPANSION. Macki explained that he
was under direction from Sultan Qaboos to grow Oman Air slowly and
prudently with his eye on the bottom line. He was not to "jump"
into competition with Emirates Airlines or Gulf Air.
GRAPPO

To view the entire SMART message, go to URL http://repository.state.sgov.gov/_layouts/OSS SearchResults.aspx?k=messageid:63eb97d8-565f- 4b08-8011-7a37699bced9