Sat, Aug 23, 2003 - Page 4 News List

China Airlines reacts to complaints about deal

NO POLITICS The airline says it decided to buy engines from an American company after a thorough screening process and there was no bias against other contenders

By Joy Su  /  STAFF REPORTER

In response to recent complaints from the European Commission regarding China Airlines' (CAL) purchase of airplane engines for between US$600 million and US$800 million from American manufacturers on Aug. 13, CAL representatives stressed yesterday that the engines had been bought out of commercial, not political interest.

"The selection process involved more than six months of evaluating the quality, cost, technical support and warranty stipulations of American manufacturers General Electric (GE) and Pratt & Whitney, as well as Britain's Rolls Royce. We eventually chose GE because of its superiority in these areas and its offer to dispose of our last 747-200 aircraft," a China Airlines representative said.

Furthermore, China Airlines said that Pratt and Whitney, despite failing to clinch the deal, wrote to express their gratitude for CAL's help and support. The letter also stated that the company "recognized that CAL's decision was based on business interests."

The European Commission's spokesman, Michael Mann, stated on Thursday that Taiwan was bound by its WTO obligations to conduct its business based on commercial factors alone. He further demanded clarification from Taiwan and said that CAL's decision could have negative consequences for Taiwan-EU relations.

An anonymous source said that if the European Commission were to invoke the fair trade agreements of the WTO, it would have to take up the burden of proof, which would put the EU in a difficult position.

CAL also cited its purchase last December of twelve A330-300 freight planes from European manufacturer Airbus as proof of its willingness to do business with European manufacturers.

CAL emphasized that at no point during the evaluation and negotiation process was the European producer eliminated, and further said it was satisfied that the contract fulfilled its management needs.

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