Tue, Jul 29, 2003 - Page 10 News List

Rolls-Royce sweetens bid for CAL contract

By Bill Heaney  /  STAFF REPORTER WITH AFP

British-based Rolls-Royce Ltd may be the front runner in a bid to supply China Airlines Co (華航) with engines for its new fleet of aircraft, a Chinese-language newspaper reported yesterday, without naming its sources.

Rolls-Royce is believed to have offered more attractive discounts on the US$3 billion contract than the two other bidders, US-based GE Aircraft Engines -- a division of General Electric Co -- and United Technologies Corp Pratt & Whitney, the report said.

The report claimed that Rolls Royce has also offered to set up a maintenance site at the CKS International Airport to provide services to China Airlines, a move which is believed to reduce the airline's financial burden.

Rolls-Royce's offices are currently located at Taipei's Sungshan Airport.

Airline spokesman Roger Han (韓梁中) was unavailable for comment yesterday, but an unnamed official said that maintenance was a crucial consideration.

"The aircraft are new and we need to consider maintenance capabilities. We also need to consider the training costs for new maintenance staff," he said.

The official said that no decision had been made on the contract yet, but he expected there would be an announcement "in the near future."

Paul Brooks, Rolls-Royce's general manager in Taiwan, remained tight-lipped about the deal yesterday.

"We don't make comments on commercial negotiations," he said.

Brooks said that the airlines had not given him any indication of when they might make a decision.

"They control the timeline, not us," he said.

When the contract is finalized, the engines will be installed on 12 Airbus A330 aircraft and 10 Boeing 747-400s the airline ordered last December with an option to buy six more Airbuses.

The total for the two deals, according to list prices, would be US$3.9 billion, with each 747-400 priced at US$200 million and the A330 at US$190 million, but in January Han said the carrier had received a hefty discount on the orders due to a slump in the airline industry.

China Airlines plans to buy as many as 70 engines for the new planes, including spares, local media reported last week when the airline took delivery of a new Boeing 747-400 freighter, the first of 22 such planes.

The carrier operates a fleet of 57, composed of 42 passenger aircraft and 15 freighters.

When the state-owned airline announced at the end of last year that it intended to purchase European aircraft, it caused a political storm because of the nation's reliance on US political and military support.

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