Air India’s 787 penalty payment, 787 vs A330 efficiency
This article from India has an interesting reference to the penalties paid to Air India by Boeing (and what the airline originally wanted) for the delays of the 27 787s on order.
The article also notes that Air India’s analysis is that the 787 is 17% more fuel efficient than the A330.
Categories: Airbus, Boeing
Air India, Airbus, Airbus A330, Boeing, Boeing 787
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Leeham News and Comment
- Comparing the 787, 777-200/300ER and the 777-8/9X May 17, 2013
- Assessing the A350 program May 16, 2013
- Boeing gets launch order for MAX 7 May 15, 2013
- Taking care of business at the airframe OEMs May 15, 2013
- EADS earnings and Airbus A350, A380 updates May 14, 2013
Three things really catch my eye in this article:
1. India Air claims the internal rate of return on their 777 is 2.6%
2. Boeing is offering penalties of 20% of what they are claimimg
3. The 787 is 17% more fuel efficient than the A340
All of these points are questionable to my mind…at least the accuracy of some of these numbers but they make for interesting comparisons and argumentation
Is it the A340 or the A330? I’m not quite sure after reading.
Boeing Investor, the article states that NACIL claims the 787 is seventeen percent more fuel efficient than the A330-200.
But, yes, one does wonder where this info comes from and how accurate it is.
Sorry for the mistake. It refers to the A330…my typo
From what I recall, it was Air India’s decision to put 9 abreast on the 787 that killed off the Mark 1 A350, which would only carry 8 across like the A330 it was due to replace. Upto that point the 787 was nominally an 8 across airliner. Airbus had no choice but to reconfigure the A350 for 9 across to be able to compete.
This does raise the interesting general question as to how late delivery penalty payments are established.
Is there a formula in the contract spelling this out or is it something that gets negotiated
It may well be that each Carrier has a different approach and its issues are handled in a unique way.
Both
My guess is penalties are negotiated and then written down in the contract.
As an airframer you probably would like to offer no penalties.
In reality you have to offer penalties to put some weight to
your stated delivery dates.
Then there are the complementary penalties for customer cancelations.
same reasoning applies.