US embassy cable - 05TAIPEI996

C O N F I D E N T I A L TAIPEI 000996 
 
SIPDIS 
 
DEPT FOR EAP/TC, EB/AVP 
DEPT PLEASE PASS AIT/W 
 
E.O. 12958: DECL: 03/08/2015 
TAGS: EAIR, BEXP, ECON, TW 
SUBJECT: CAL AIRCRAFT PURCHASES ON HOLD 
 
Classified By: AIT Director Douglas H. Paal, Reason 1.5 d 
 
1. (C) Boeing Commercial Sales representatives Paul Fang and 
Scott Grimsby met with AIT economic and commercial officers 
on February 25 to discuss possible aircraft purchases by 
China Airlines (CAL).  Boeing representatives asked AIT/T to 
inquire discreetly into two questions: whether European trade 
offices, specifically the British, had been lobbying the 
Taiwan government recently on behalf of Airbus and whether 
CAL was on the verge of announcing the purchase of four 
A-340-600 aircraft.  AIT/T agreed to make some quiet 
inquiries. 
 
2. (C) In a courtesy call with Ministry of Transportation and 
Communications Vice Minister Oliver Yu on March 7, econoffs 
expressed appreciation for Taiwan airlines close relationship 
with Boeing.  Econoffs noted that our European counterparts 
frequently work very actively to promote Airbus sales and 
that AIT wanted to be supportive of Boeing's efforts.  Yu 
indicated that he had no knowledge of any pending 
procurement.  He also emphasized that airlines in Taiwan 
would be free to make aircraft purchase decisions based 
purely on business considerations without pressure from the 
Taiwan government, the standard formulation, belied by 
government control of 70 percent of CAL stock. 
 
3. (C) In a phone call with CAL Vice President Samson Yeh of 
the Safety, Security and Compliance Division, econoff asked 
what aircraft purchases CAL had pending.  Yeh said that 
although he participates in discussions on aircraft 
purchases, he is not responsible for purchase planning. 
Nevertheless, he indicated that in the short term, CAL has 
put aircraft purchases on hold.  CAL had planned to sell some 
aircraft in its fleet but has postponed those plans.  He said 
that while Boeing and Airbus are in the process of changing 
their product lines, for example Boeing's transition from 
777s to 787s, CAL is holding off on aircraft purchases as it 
evaluates its future plans.  He denied rumors that there is 
an Airbus purchase in the works. 
 
4. (C) We have updated Boeing on our conversations and will 
continue to monitor CAL's plans. 
PAAL