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Cablegate: Boeing and Biman Sign Single Largest Capital Goods

VZCZCXRO8868
PP RUEHCI
DE RUEHKA #0474 1180054
ZNR UUUUU ZZH
P 270054Z APR 08
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC PRIORITY 6670
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEHLM/AMEMBASSY COLOMBO 8412
RUEHIL/AMEMBASSY ISLAMABAD 2140
RUEHKT/AMEMBASSY KATHMANDU 9648
RUEHNE/AMEMBASSY NEW DELHI 0613
RUEHCI/AMCONSUL KOLKATA 1262

UNCLAS DHAKA 000474

SIPDIS

SIPDIS

DEPT FOR SCA/PB AND EEB/TRA

E.O. 12958: N/A
TAGS: BEXP EAIR ETRD BG
SUBJECT: BOEING AND BIMAN SIGN SINGLE LARGEST CAPITAL GOODS
CONTRACT IN BANGLADESH HISTORY

REF: DHAKA 407

1. SUMMARY: Boeing and Biman Bangladesh Airlines (Biman)
April 22 signed a Definitive Agreement on a purchase by Biman
of eight new widebody aircraft, with purchase rights on eight
additional aircraft of the same models. The value of the
sale including purchase rights is $2.1 billion, making this
the largest capital goods contract in Bangladesh history. In
addition, a surprise announcement was made of a Memorandum of
Understanding (MOU) for Biman to purchase two new short and
medium range Boeing aircraft, with purchase options for two
more. END SUMMARY

2. Following the signing of an MOU in March (reftel), Boeing
and Biman signed a Definitive Agreement (DA) for Biman to
purchase four 777-300ER and four 787-8 aircraft, with
purchase options for four more of each, for a possible total
of 16 widebody aircraft. Identifying this sale as the
single largest capital goods contract in Bangladesh history,
Biman and Boeing officials highlighted the extraordinary
efforts that went into the agreement and the transparency
with which the negotiations were concluded. Ambassador
Moriarty remarked positively on the recent restructuring of
the airline, and the opportunity Biman now has to enhance
Bangladesh's commercial development.

------------
Boeing Sweep
------------

3. In addition to the sale of widebody planes, Biman
recently reviewed proposals from both Boeing and Airbus for
short and medium range aircraft (reftel). In a surprise
development, Biman announced that it had agreed to the Boeing
proposal, and at the conclusion of the DA signing ceremony
the two parties signed an MOU for the purchase of two Boeing
737-800 aircraft with purchase options for two more, at a
possible total value of $320 million. Boeing officials
reported that a Definitive Agreement on this sale may be
concluded within a month. As a result of these two sales,
Biman will eventually have an all Boeing fleet.

4. Mahbub Jamil, the Special Assistant to the Chief Adviser
for Civil Aviation and Tourism, who chairs the Board of
Directors of Biman, told the Ambassador that the decision to
buy Boeing widebodies had been easy; Airbus had not made a
realistic offer. Airbus had provided much stiffer
competition with respect to short and medium range aircraft.
The ability to lease used 737's quickly while awaiting
delivery of new aircraft had tilted that deal in Boeing's
favor.

----------
Next Steps
----------

5. Jamil announced that Bangladesh is expected to ratify the
Cape Town Convention in May, an essential step for the
financing of the aircraft purchases (reftel). The conclusion
of the two DA's will open the way for Boeing to proceed with
the leases of aircraft to serve Biman in the interim period
until the new planes are delivered.
Moriarty

© Scoop Media

 
 
 
 
 
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