US embassy cable - 04ABUDHABI4187

UNCLAS ABU DHABI 004187 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR NEA/ARP, NEA/RA, EB 
STATE PASS USTR 
USDOC FOR 3418A/TD/AS/CJAMES 
 
E.O. 12958: DECL 
TAGS: EAIR, ETRD, MCAP, PTER, TC 
SUBJECT: BOEING CEO BRIEFS AMBASSADOR 
 
This cable contains business proprietary information.  Not 
for internet distribution. 
 
1. (SBU) Summary:  Boeing CEO Harry Stonecipher 
(accompanied by his vice presidents for international 
relations, commercial airline sales for the Middle East and 
defense sales to the Middle East) briefed Ambassador on 
November 20 on Boeing programs and priorities in the United 
Arab Emirates.  He confirmed that Etihad Airlines had 
bought 5 Boeing 777-300 aircraft and that Boeing is still 
trying to get the UAEG to sign a letter of acceptance for 
the Harpoon missile.  Finally, he noted that potential 
liability issues were discouraging Boeing from bidding for 
projects to integrate border and airport security systems. 
End Summary. 
 
Civil Aviation 
-------------- 
 
2. (SBU) Stonecipher confirmed that Etihad Airlines had 
signed a purchase order with Boeing to buy 5 Boeing 777-300 
extended range aircraft, with delivery to start in October 
2005.  The scheduled delivery for the planes is: one in 
October, two in November, and 1 in December.  He said that 
Etihad would likely announce the deal in a few days. 
Stonecipher also told the Ambassador that Etihad was still 
negotiating with Airbus over its announced purchase. 
According to Boeing, Emirates Airlines has had problems 
with its Airbus 340-500 aircraft on the Dubai - New York 
flight.  The aircraft have had seven engine changes and are 
unable to make the flight from Dubai to New York with a 
full payload.  The bottom line is that Emirates Airlines is 
discovering that operating the Airbus 340 on this flight is 
more expensive than it realized (and he suggested, more 
expensive than operating a comparable Boeing 777). 
 
3. (SBU) In response to Ambassador's question, Stonecipher 
stated that the discussions with Emirates about the 7E7 
were "not going anywhere."  He explained that Emirates had 
said that even the "stretch" 7E7 was not big enough for its 
current requirements.  Finally, Stonecipher said that 
Boeing would be assigning two civil aviation sales 
representatives to Dubai. 
 
Defense 
------- 
 
4. (SBU) Stonecipher confirmed that Boeing was still trying 
to get the UAE to sign the letter of acceptance on the 
Harpoon Missile, before the offer expired at the end of 
December. 
 
5. (SBU) Stonecipher noted that he expected that Boeing 
would deliver its 767 Tanker proposal to the UAE Air force 
by the middle of December.  Boeing is competing with Airbus 
to supply the UAE Air force with two tankers. 
 
6. (SBU) Stonecipher briefly discussed Boeing's two 
helicopter programs in the UAE (the AH-64 Apache and the 
CH-47 Chinook).  He said that Boeing had met with the head 
of land forces on the AH-64 Apache program and had been 
told that if Boeing could get the Apache helicopters 
operational again, the UAE would again look at upgrading 
the helicopters to the AH-64D-model, Block 2.  Boeing has a 
direct commercial support contract under review at UAE GHQ 
to rehabilitate the helicopters.  USLO Chief told 
Stonecipher that the UAE Special Operations Command had 
just presented a letter of request for a training and 
maintenance package for the CH-47 Chinook to USLO. 
 
7. (SBU) Stonecipher also noted that Boeing was no longer 
interested in work integrating border or airport security 
systems, despite its expertise in this area.  The problem, 
he explained, was one of liability.  The UAE would want 
Boeing to assume unlimited liability if anything went wrong 
(i.e., if a terrorist slipped through the system).  The 
Ambassador commented that this is a challenge facing a 
number of U.S. companies in the security service field. 
Stonecipher noted that it apparently does not affect the 
European companies, which seem comfortable signing 
contracts with potential liability clauses.  (Note: 
Stonecipher also said that Boeing faces similar problems in 
the U.S.) 
Sison