Boeing demands fair evaluation of its proposals for selling 6 planes to Biman

The US-based aviation giant Boeing demanded a fair evaluation of its proposal made to Biman Bangladesh Airlines about selling four 787 Dreamliner passenger planes and two 777 freighters.

"We have had a proposal on the table for years now," said Ryan Weir, vice president of India and South Asia Commercial Sales and Marketing at Boeing, when speaking with journalists at a city hotel yesterday. "We understand that Airbus's proposal to sell two A350s was evaluated."

"We are hoping our proposal will be evaluated before a final decision is taken," he said, while two other Boeing representatives were present at the meeting with journalists and also answered questions.

The other two Boeing representatives are Ashwin Naidu, Managing Director-Commercial Marketing, Eurasia, and Indian Subcontinent, and Kaanthi Bhuvanagiri, BCA Sales Director.

Boeing representatives also estimated that Biman will have to pay an additional complexity cost of nearly $150 million over the next 20 years if it mixes its fleet with Airbus planes. They suggested that the airline could purchase another plane with these complexity costs.

The team claimed that Boeing's product will be as affordable as, or less expensive than, those of their competitors.

Here is the question-answer session with Boeing and journalists:

What is the progress on the Boeing proposal? 

We met key leaders in the Prime Minister's Office and in the Ministry of Aviation, along with key leaders at the airline. They have all assured us that our proposal will be evaluated.

We are hoping our proposal will be evaluated before a final decision is taken.

We made proposals for four wide-bodied passenger planes and two freighters. This goes back to addressing the vision of the prime minister, who is very keen on building the cargo market with Biman.

There is a big export market out of Biman, and a lot of other airlines are taking that cargo market today.

So in order to address the vision of the prime minister, we have also submitted a proposal for two freighters.

We have yet to hear of a timeframe, but our request is out there, and they have assured us of that evaluation.

We understand that the Airbus proposal was evaluated. Several people, including the minister and people at the airline, said that the Boeing 787 would be evaluated. We are always after a fair evaluation of our products.

 There is a safety concern about the 787 Dreamliner worldwide. So should Biman consider procuring 787?

I believe there was a press release by the minister kind of expressing concerns and directing Biman to work with Boeing. We formally responded to that letter to the minister with full documentation in terms of what we have done.

The issue started in 2021; it was a self-reported issue. We found something in our production process that we wanted to make sure was okay or addressed.

And then we spent the next 18 to 24 months working with the FAA (Federal Aviation Administration) and going through rigorous engineering evaluations to ensure that the build of our aeroplane was safe.

We then took steps to rework all the aeroplanes that we had built. We basically created inventory for that period of time. We slowed production but continued to build aeroplanes.

And then we went and reworked those aeroplanes and were in the process of delivering those aeroplanes to the customers.

And then I know that recently there has been a lot of media coverage of the whistle-blowers, and we always respect a whistle-blower in this case. We believe that those claims are inaccurate.

Those claims are exactly what we were working on for 18 to 24 months with the FAA to make sure that we were building to the specs that we had designed for the airplane. The 787 has been through rigorous, rigorous tasks.

A lot of that frustration stems from not necessarily safety concerns, but a lot of the frustration right now is because they are not getting aeroplanes fast enough.

Because the market is demanding airplanes. People want to travel both in the United States and around the world. And they need to have aeroplanes to replace them.

And those aeroplanes are late for a variety of reasons, largely outside of Boeing control.

The industry has basically gone from almost zero production to 30 to 40 aeroplanes a month coming out of Covid and in that time, the industry, Boeing included, lost a lot of experienced people who left as a result of Covid and didn't come back.

And so to replace those people and increase production rate, it put a huge strain on the whole production system, supply chain.

Why is Boeing better than Airbus?

First and foremost, bringing on a new fleet type of aeroplane, whether it be the A350 or any other wide-body aeroplane, was going to cost the airline about $150 million, or a little less.

That doesn't change significantly based on the number of aeroplanes you bring on.

That is essentially enough money to pay for one more aeroplane, reinvest in the airline, and do other things that Boeing would argue would be more productive.

But on top of that, we believe that on the critical missions that Biman is evaluating and would evaluate, the 787 would produce about $5 million more profit per plane annually operating those routes.

We have a detailed study behind it, and it is predicated on, you know, 6% less fuel per trip operating the 787, 30% less maintenance costs because of the design and construction of the 787.

And we can offer competitive delivery timing with a delivery position of 787.

Boeing products are going to be more or less expensive than those of our competitors.

So anytime you have a set infrastructure and now you suddenly bring on a new aircraft type, first you start with all your tooling, your maintenance infrastructure, and all your investments that you have to make in spare aeroplanes, spare parts, tools, and spare engines.

We have a detailed study that we have shared with the airline, and it has been demonstrated that the extra complexity will cost $150 million over 20 years.

But that is a cost that includes three or four major line items and expenses, training, tooling, and maintenance infrastructure, engine parts, and engine spares.

Moreover, the airline is going to take all those pilots who are operating the 787 and send them on ground training, classroom training, and simulator training, all to fly a new aircraft type.

So all those costs add up very substantially, and there is a big jump in expenses upfront, and recurring expenses each year that continue to add to the expense line.