Cargolux 747-8F delivery looks likely to slip out of this week

Cargolux-747-8Ftail.jpg

SEATTLE — With a cancelled ceremony on Friday in Luxembourg and 787 delivery on Monday, it is looking “highly unlikely” that Boeing, Cargolux, GE and Qatar Airways will solve their contractual dispute over the first 747-8 freighters by week’s end. The issue is looking increasingly tied to the GEnx-powered 787s Qatar has on order, as well as twin 747-8Is for the Government of Qatar. 
Here’s my latest report:

Cargolux 747-8F delivery becomes “highly unlikely” this week
By Jon Ostrower/Seattle

The 747-8 freighter contract dispute has made delivery this week of the new jumbo to Cargolux “highly unlikely” as the parties continue to negotiate, said industry sources.

Cargolux is said to have cancelled a planned 23 September event with the 747-8F in Luxembourg. Cargolux was unreachable for comment.

Boeing declined to comment on delivery timing for this week, and stated: “We continue to work with Cargolux to find a time to deliver its airplanes.”

13 Responses to Cargolux 747-8F delivery looks likely to slip out of this week

  1. GraemeA September 19, 2011 at 7:33 pm #

    In order to understand the Al Baker style it is important to understand the difference between the underlying premise of an American business transaction compared to an Arab one:

    Whereas the American party will always strive toward a win-win outcome, the Arab sees business as a zero sum game – that is, for one party to win in a transaction, the other party must, by definition, lose.

    It’s the same in Arab politics.

  2. Wikcbtcuar? September 20, 2011 at 6:15 am #

    Where is KC-Buffoon to cry us a river?

  3. WingBender September 20, 2011 at 12:26 pm #

    One of the Cargolux freighters took off for Moses Lake about half an hour ago.

  4. WingBender September 20, 2011 at 12:37 pm #

    @GraemeA: Excellent points. To further elaborate, there is the Arab desire to create linkages where none exist. Boeing’s contracts with Cargolux and Qatar are negotiated separately. Mr. al-Baker wants to link the two so he can invoke a quid pro quo. If Boeing will agree to give up a few more shekels on the Qatar 787 contract, then Cargolux will take delivery of (and pay for) its freighters. Forget the fact that the 787 delays are of absolutely no concern to Cargolux.

  5. iamlucky13 September 20, 2011 at 1:44 pm #

    Not to mention, supposedly Cargolux had already negotiated compensation for the 747-8 performance issues.

    Throwing a fit over an issue that was already settled is not negotiating in good faith.

  6. BA Investor September 20, 2011 at 1:53 pm #

    I wonder whether the investment by Qatar in Cargolux was partially motivated by the leverage it would give Al Baker over matters between Boeing and Quater. There was a linkage established when he joined the Cargolux Board and could exercise some oblique influence ( direct?) over Boeing.

    This was a very shrewd and embarassingly effective tactic and is definately an example of “thinking out of the box”.

    The matter will ultimately resolve itself but at a cost to Boeing. This is an example of how competitive and nasty negotiations can get. Of course, if there were no delays these issues would not be available and it would have been a win -win for all parties.

  7. Guru Josh September 20, 2011 at 2:12 pm #

    “the American party will always strive toward a win-win outcome”
    A very interesting view. So when has Wall Street been taken over by the Arabs?

  8. GraemeA September 20, 2011 at 3:21 pm #

    Boeing should play hardball and break this Al Baker clown. They should just cancel his orders and refuse to do business with him. He’ll go to Airbus who will then hit him with high high prices.
    Someone who does not do business in good faith needs to be taught a lesson.

  9. Dinant van den Belt September 21, 2011 at 3:52 am #

    interresting comments about the alledged Arab bussiness model. What I read from Jons info, is that simply Cargolux is not satisfied with the performance of the plane, meaning probably higher fuel consumption than promised by Boeing.
    This askes for a 747-8 F MAX development…..

    However with additional compensation the 747-8 development will be even harder to prove its return on investment.

  10. Aviation Training India September 21, 2011 at 6:06 am #

    It is really a disappointing news for all of us. It would have been great if this contractual issues have not risen now. Then we could have got a glance of this 747-400 Freighter. Boeing, Cargolux, GE and Qatar Airways will solve their contractual dispute soon.

  11. Dinant van den Belt September 21, 2011 at 6:57 am #

    interresting comments, but the only issue between Cargolux and Boeing is a 2.7% extra use of fuel. Boeing does not comply to it’s bidbook, accordingly a customer will complain and seek compensation.
    Nothing of Arab vs American business models, just a contract breach by Boeing.

  12. fishboyslim September 21, 2011 at 2:52 pm #

    Dinant, you’re missing something…

    The performance issue is well known, Cargolux and Boeing have obviously negotiated a settlement under the terms of their contract…

    What changed between Sept 2 (when CV said “We’re proud to get the airplane”) and Sept 18 (when CV pulled their team out and said “no way, jose!”)???

  13. BA Investor September 21, 2011 at 3:28 pm #

    In a well written contract, provisions are made for failure to perform or to define formulas for compensation.

    Under the circumstances of the Cargolux change of Board there appears to be something else at hand and the various speculations all seem to think it is a strategy rather than an aircraft issue. Cathay Pacific seems to be having no problems with acceptance of their aircraft.

    We probably will never know the truth as the parties will sort out their differences and the negotiations will resolve whatever was really at hand but may set a new marker for a future rounds of arm wrestling.