Monday, June 20, 2011

How to negotiate the purchase of an aircraft


Technology blog from Bangladesh

Joli presented in this airplane flight!The silhouette is elegant, there is little noise, he turned and landed well short.On the ground, the visitor finds that the Bourget inside is clear, the seats are comfortable cockpit with its large screen seems to be the latest.At the cottage of the manufacturer, the champagne flows and the technical documentation provided to the full color potential purchasers is attractive.Press to order the seller because the waiting list goes on ....The buyer signs.

The general public might think that this is so, that these purchases billions of dollars are made between two conversations show.This is - thankfully - that the announcement effects and hidden negotiations often lasting several months or even years."No sooner was it ordered a plane that we look at who his successor will be," Peter likes to say Velay, that was until recently director of the Air France fleet.In the major airlines, a service "fleet" is working full time on these issues to the technical, financial and commercial complexes.The order of a hundred long-haul by the national company and is expected soon to study for more than five years.

Sale price secret

When the contract is signed, only the seller and the manufacturer know the exact price of the transaction, the data is too sensitive to be made public.Just does one communicate an MSRP "boilerplate".In addition, for some aircraft may be equipped with a choice of reactor provided by two, sometimes three engine, this negotiation is not just the manufacturer.A separate contract was signed with an engine.Note that the thrusters represent between one quarter and one third of the total price.Motorists tend to say they do present reactors.They would not be charged at fair value.Reassure us, the Snecma, Pratt & Whitney, Rolls and other General Electric catch up and then return to their investments by charging the spare parts at exorbitant prices.

Buy-side, negotiating the best will be achieved by keeping the two major global neck and neck until the last moment, never reveal that one has taken the advantage over the other ...

Agreement on CD-ROM

The gross price of the appliance is not the only issue in the negotiation.The posting of a new aircraft requires training a generation of pilots (at least six crews per aircraft) and many technicians.The manufacturer can provide this service until the company equips a flight simulator (very expensive and profitable only with a large fleet).The options are fewer than in the past but can still reach 10% of the price.The parts weigh heavily in the balance sheet of operations (six million, for example, landing gear, a million to a revised engine).Over 60% of the price of the aircraft are then spent on maintenance during its lifetime, about 25 years.The current trend leads companies do not tie up expensive inventory, but to negotiate with manufacturers or specialists such as Snecma (Safran group) a guaranteed benefit at the time of flight, including labor and delivery rooms.Thus, a reactor parts can be guaranteed, made in 72 hours anywhere in the world.

For the sales contract itself, it takes 150 pages, plus annexes techniques, weighing tens of kilograms, are now engraved on CD-ROM.The language of the country must sometimes be used and the Local Government Procurement Code may require to provide a full curriculum vitae of the CEO of the manufacturer.Airbus, French law applies generally, the three-year warranty was extended to twelve for some parts of primary structure.In general, 10% are paid to the order, other deadlines are usually provided, but there is often 80% of the price to be paid upon delivery.Everything is negotiable, except one thing: the aircraft leaves the parking lot of the plant after transfer of the balance.International regulations prohibit the manufacturer of credit.

The intricacies of contracts for the sale of aircraft

Paris Air Show, we also announced orders, but some have a certain smell of virtual.Learn to read between the lines of those contracts.The optimistic claims abound.Can be classified in this category that the Anglo-Saxons call a MOU, a memorandum of understanding or letter of intent.They include positive aspects, however: at this stage of negotiation, the company has validated the choice of manufacturer, model and a number of aircraft.She will not see the competitors must reject any new proposal.

Another subtlety of negotiations, the options are not like a car, supplements the basic version, but reservations may one day become orders.Benefit to the client, it freezes the price of the aircraft provided to confirm before a certain date.It is a way to rank on the assembly line.This position may be resold from company to company during periods of high tension in demand for airplanes that air transport world begins to experience again.


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