Identifier
Created
Classification
Origin
10PORTOFSPAIN142
2010-02-01 19:11:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Port Of Spain
Cable title:
BOEING LIKELY TO WIN CARIBBEAN AIRLINES DEAL
how-toVZCZCXYZ0003 RR RUEHWEB DE RUEHSP #0142/01 0321912 ZNR UUUUU ZZH R 011911Z FEB 10 FM AMEMBASSY PORT OF SPAIN TO RUEHC/SECSTATE WASHDC 0200 INFO EC CARICOM COLLECTIVE RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUEHDG/AMEMBASSY SANTO DOMINGO
UNCLAS PORT OF SPAIN 000142
SENSITIVE
SIPDIS
SANTO DOMINGO ALSO FOR US COMMERCIAL SERVICE
E.O. 12958: N/A
TAGS: ETRD EAIR EFIN ECON PGOV TD
SUBJECT: BOEING LIKELY TO WIN CARIBBEAN AIRLINES DEAL
REF: 09 PORT OF SPAIN 506
BUSINESS SENSTIVE INFORMATION: PLEASE PROTECT ACCORDINGLY
UNCLAS PORT OF SPAIN 000142
SENSITIVE
SIPDIS
SANTO DOMINGO ALSO FOR US COMMERCIAL SERVICE
E.O. 12958: N/A
TAGS: ETRD EAIR EFIN ECON PGOV TD
SUBJECT: BOEING LIKELY TO WIN CARIBBEAN AIRLINES DEAL
REF: 09 PORT OF SPAIN 506
BUSINESS SENSTIVE INFORMATION: PLEASE PROTECT ACCORDINGLY
1. (SBU) SUMMARY: A Boeing representative told us that Trinidad
and Tobago's Caribbean Airlines (CAL) will endorse Boeing's bid to
sell the national airline ten new 737-800 aircraft it sorely needs,
a deal potentially worth USD 790 million and for which we conducted
extensive advocacy. The deal has been complicated by stiff
competition from rival Airbus and a possible CAL purchase of
neighbor airline Air Jamaica (reftel),but ultimately it appears
Boeing's strategy of playing hard-to-get may have paid off. If
Boeing is successful, the deal would raise to well over a
half-billion dollars the value of successful advocacy conducted by
the Embassy in the last year. END SUMMARY.
--------------
AGGRESSIVE OFFER PAYS OFF
--------------
2. (SBU) Boeing Sales Director David Parker told us that CAL
informed him January 27 that the Trinidad and Tobago (TT)
state-owned airline would recommend the GOTT accept Boeing's offer
in a key stakeholder meeting to take place on February 4. Parker
described his January 27 sales pitch to CAL CEO Ian Brunton and
other key executives as an "aggressive business offer" that
included a roughly 50% discount on the ten 737-800 aircraft for
sale and purchasing rights to an additional ten aircraft under the
same favorable terms. The offer also included provisions for
Boeing to provide CAL personnel with any required training on the
new aircraft; a deal-sweetener that Airbus already pitched in 2009.
Boeing previously estimated that the deal could be worth some USD
790 million, but Parker confided to us that he expects CAL to buy
only five of the ten planes offered under the deal.
--------------
CAL FRENCH CONSULTANT A MAJOR OBSTACLE
--------------
3. (SBU) Boeing's major challenge, according to Parker, had been
the need to maneuver around French CAL lead consultant,
Jean-Frederic Mognetti, who Parker described as a trusted confidant
of CAL Chairman Arthur Lok Jack and who, according to Parker, has
been determined to sway Lok Jack toward Airbus. Parker alleged
that Mognetti had consistently forwarded business sensitive details
of Boeing's negotiations to Paris.
--------------
CAL - AIR JAMAICA PURCHASE A DONE DEAL?
--------------
4. (SBU) Parker said that he has seen high-level internal AJ memos
stating that the CAL-Air Jamaica (AJ) purchase is a done deal (ref
B). He said he privately believes that CAL would be better served
not to purchase the troubled Jamaican airline because of its past
struggles with local unions, suggestions of internal corruption,
domestic opposition to foreign operation, and AJ's aged fleet. But
those points notwithstanding, Parker noted that a CAL-AJ merger
might actually benefit Boeing because CAL would then likely replace
the "deteriorating" AJ Airbus fleet with newer and larger Boeing
737s. He said the leases on AJ's six older Airbus aircraft expire
in 2012.
--------------
COMMENT: ADVOCACY SUCCESSES
--------------
5. (SBU) Boeing's strategy to avoid making a detailed offer until
now (reftel) appears to have paid off, assuming CAL sticks to its
recommendation and the GOTT stakeholders' committee accepts it. We
previously provided extensive advocacy on behalf of Boeing for this
deal, and company executives are considering whether any further
intervention with the GOTT is warranted. Parker told us he is
confident at this point that having won over CAL's executives was
the crucial step in the decision-making process, and will let us
know if the company feels a final round of advocacy with the
Minister of Transport would be beneficial. If Boeing is successful
with CAL, combined with a June 2009 helicopter contract for
AugustaWestland, the Embassy would have successfully advocated for
well over a half-billion dollars worth of contracts for American
companies in the last year.
Kusnitz
SENSITIVE
SIPDIS
SANTO DOMINGO ALSO FOR US COMMERCIAL SERVICE
E.O. 12958: N/A
TAGS: ETRD EAIR EFIN ECON PGOV TD
SUBJECT: BOEING LIKELY TO WIN CARIBBEAN AIRLINES DEAL
REF: 09 PORT OF SPAIN 506
BUSINESS SENSTIVE INFORMATION: PLEASE PROTECT ACCORDINGLY
1. (SBU) SUMMARY: A Boeing representative told us that Trinidad
and Tobago's Caribbean Airlines (CAL) will endorse Boeing's bid to
sell the national airline ten new 737-800 aircraft it sorely needs,
a deal potentially worth USD 790 million and for which we conducted
extensive advocacy. The deal has been complicated by stiff
competition from rival Airbus and a possible CAL purchase of
neighbor airline Air Jamaica (reftel),but ultimately it appears
Boeing's strategy of playing hard-to-get may have paid off. If
Boeing is successful, the deal would raise to well over a
half-billion dollars the value of successful advocacy conducted by
the Embassy in the last year. END SUMMARY.
--------------
AGGRESSIVE OFFER PAYS OFF
--------------
2. (SBU) Boeing Sales Director David Parker told us that CAL
informed him January 27 that the Trinidad and Tobago (TT)
state-owned airline would recommend the GOTT accept Boeing's offer
in a key stakeholder meeting to take place on February 4. Parker
described his January 27 sales pitch to CAL CEO Ian Brunton and
other key executives as an "aggressive business offer" that
included a roughly 50% discount on the ten 737-800 aircraft for
sale and purchasing rights to an additional ten aircraft under the
same favorable terms. The offer also included provisions for
Boeing to provide CAL personnel with any required training on the
new aircraft; a deal-sweetener that Airbus already pitched in 2009.
Boeing previously estimated that the deal could be worth some USD
790 million, but Parker confided to us that he expects CAL to buy
only five of the ten planes offered under the deal.
--------------
CAL FRENCH CONSULTANT A MAJOR OBSTACLE
--------------
3. (SBU) Boeing's major challenge, according to Parker, had been
the need to maneuver around French CAL lead consultant,
Jean-Frederic Mognetti, who Parker described as a trusted confidant
of CAL Chairman Arthur Lok Jack and who, according to Parker, has
been determined to sway Lok Jack toward Airbus. Parker alleged
that Mognetti had consistently forwarded business sensitive details
of Boeing's negotiations to Paris.
--------------
CAL - AIR JAMAICA PURCHASE A DONE DEAL?
--------------
4. (SBU) Parker said that he has seen high-level internal AJ memos
stating that the CAL-Air Jamaica (AJ) purchase is a done deal (ref
B). He said he privately believes that CAL would be better served
not to purchase the troubled Jamaican airline because of its past
struggles with local unions, suggestions of internal corruption,
domestic opposition to foreign operation, and AJ's aged fleet. But
those points notwithstanding, Parker noted that a CAL-AJ merger
might actually benefit Boeing because CAL would then likely replace
the "deteriorating" AJ Airbus fleet with newer and larger Boeing
737s. He said the leases on AJ's six older Airbus aircraft expire
in 2012.
--------------
COMMENT: ADVOCACY SUCCESSES
--------------
5. (SBU) Boeing's strategy to avoid making a detailed offer until
now (reftel) appears to have paid off, assuming CAL sticks to its
recommendation and the GOTT stakeholders' committee accepts it. We
previously provided extensive advocacy on behalf of Boeing for this
deal, and company executives are considering whether any further
intervention with the GOTT is warranted. Parker told us he is
confident at this point that having won over CAL's executives was
the crucial step in the decision-making process, and will let us
know if the company feels a final round of advocacy with the
Minister of Transport would be beneficial. If Boeing is successful
with CAL, combined with a June 2009 helicopter contract for
AugustaWestland, the Embassy would have successfully advocated for
well over a half-billion dollars worth of contracts for American
companies in the last year.
Kusnitz