The bad option to cancel an option – the EL AL Boeing 787s

By ARIE EGOZI

 

Long-term planning is important to every industry, but it is crucial in air transport.

The time between ordering new aircraft and delivery is long and can cause an airline many problems if not taken into account.

When Israeli airline EL AL cancelled options for 10 Boeing 787s in 2006 many eyebrows were raised. The airline said it did not have the money to keep the slot.

In early December, EL AL management met Jim Albaugh, president and CEO of Boeing Commercial Airplanes while he visited Israel.

EL Al referred to a general discussion about “future procurement”, but the fact is the meeting was focused on an effort by the Israeli airline to use the “special relations” with Boeing to get at least a number of 787s before the earliest possible date, which is now 2019.

Airline sources say the cancellation decision was a mistake and could cause problems for EL AL in the near future.

Despite EL AL being a relatively small client of Boeing, there are “special relations” between the two companies. This has been demonstrated a number of times, including when Airbus made a big effort to break the Boeing monopoly with EL AL.

It was so important to the American manufacturer that the effort to stay a sole supplier involved very senior figures in past administrations.

I am sure Boeing will try to help, but it will not be easy, and aircraft the size of the 787 is just what EL AL needs now.

Planning, even in hard times, is essential. EL AL is learning that the hard way.

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