VZCZCXRO6760
PP RUEHTRO
DE RUEHAS #0319 0771131
ZNR UUUUU ZZH
P 171131Z MAR 08
FM AMEMBASSY ALGIERS
TO RUEHC/SECSTATE WASHDC PRIORITY 5464
INFO RUEHFR/AMEMBASSY PARIS 2623
RUEHRB/AMEMBASSY RABAT 2246
RUEHTU/AMEMBASSY TUNIS 7098
RUEHTRO/AMEMBASSY TRIPOLI
RUEHCL/AMCONSUL CASABLANCA 3328
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS ALGIERS 000319 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EB/TRA - JBYERLY, JREIFMAN 
DEPT OF TRANSPORTATION FOR SEHATLEY 
 
E.O. 12958: N/A 
TAGS: EAIR BEXP AG
SUBJECT: NEW AIR ALGERIE LEADERSHIP READY FOR BOEING 
COURTSHIP 
 
REF: A. 07 ALGIERS 1772 
     ¶B. 07 ALGIERS 946 
 
¶1. (U) In a March 15 meeting with the Ambassador, new Air 
Algerie President Abdelwahid Bouabdallah and his assistant 
Amar Mahiout told us they intended to move quickly to replace 
part of Air Algerie's mid-range Boeing 737 fleet (ref A). 
Bouabdallah said that they would be looking for delivery of 
ten new 100-150 seat jets in 2009, of which two would be 
cargo planes.  The officials told us that they have heard 
nothing from Boeing since Bouabdallah's arrival on the job 
last month.  Meanwhile, Airbus has been aggressively courting 
their business, including phone calls from the Airbus 
president and offers to slash aircraft prices.  Because Air 
Algerie already has Boeing simulators and maintenance 
experience, Bouabdallah said the company was inclined to 
purchase from Boeing, but needed guidance on which specific 
type of aircraft and specifications would best suit Air 
Algerie's needs.  Bouabdallah said they wanted a broad 
contract with Boeing, to include consulting and maintenance 
support. 
 
¶2. (U) Given the decline of the dollar, Bouabdallah said that 
buying from Boeing remained a more attractive option for Air 
Algerie, despite some dissatisfaction with the last contract 
Air Algerie signed with Boeing.  According to Bouabdallah, 
Air Algerie signed that contract for the purchase of 737-600 
aircraft which turned out not to be the most economical 
choice of the various 737 options available to them at the 
time, given its smaller baggage hold.  He said he hoped 
Boeing would discuss and guide them through the options and 
help us choose the one that makes the most sense. 
Bouabdallah also mentioned a finance rate of 5.25 percent on 
Air Algerie's last Boeing deal, saying that he now knows they 
could have done better, as he said he has seen other current 
aircraft financing arrangements on the market of between 2 
and 3 percent.  Finally, he said that the French-U.S. joint 
venture CFM engine for the 737-600 and 800s had given them 
some problems on routes in southern Algeria, since the 
engines had not received the appropriate internal coating to 
protect it against sand.  (He also noted that Air Algerie had 
experienced greater problems with its two Airbus 310 
aircraft, which he said would likely be taken out of 
passenger service soon.) 
 
¶3. (U) Bouabdallah said he had no aviation background and 
simply wanted to make the right choice: "I have no religion" 
regarding the Boeing-Airbus rivalry, he said.  But he pointed 
out that despite Boeing's history with Air Algerie, Airbus 
was "playing on their geographical advantage" and pushing 
hard to break Boeing's market share in Algeria.  Since the 
last Air Algerie visit to Boeing was approximately three 
years ago, according to Mahiout, the Ambassador stressed that 
it was high time for a visit, adding that we would transmit 
Bouabdallah's message to Boeing immediately. 
FORD