VZCZCXRO6816
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #2056/01 2081227
ZNR UUUUU ZZH
P 261227Z JUL 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 6100
INFO RUEHRL/AMEMBASSY BERLIN 1461
RUEHLO/AMEMBASSY LONDON 2123
RUEHFR/AMEMBASSY PARIS 6207
RUEHFK/AMCONSUL FUKUOKA 9042
RUEHNAG/AMCONSUL NAGOYA 7246
RUEHNH/AMCONSUL NAHA 1416
RUEHOK/AMCONSUL OSAKA KOBE 2772
RUEHKSO/AMCONSUL SAPPORO 9625
RUEHBS/USEU BRUSSELS
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 TOKYO 002056 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/J, EEB/CBA 
PASS TO USTR FOR BEEMAN 
PASS TO DOT FOR GRETCH 
USDOC FOR 3132/USFCS/ADESARRAN 
USDOC PLS PASS THE ADVOCACY CENTER/LARRY NAVIN 
 
E.O. 12958: N/A 
TAGS: BEXP EAIR PREL JA
SUBJECT: BOEING'S CONCERNS ABOUT ANA LARGE AIRCRAFT PURCHASE 
 
REF: 06 NAGOYA 48 
 
SENSITIVE BUT UNCLASSIFIED.  CONTAINS PROPRIETARY INFORMATION. 
 
¶1. (SBU) Summary: Boeing is concerned about possible EU 
governments' intervention on Airbus' behalf in connection 
with future purchases of large civil aircraft by All Nippon 
Airways (ANA).  Representatives of ANA have told Emboffs, 
however, that any such purchase should be based solely on 
economic considerations.  End Summary. 
 
-------------------- 
Boeing's Perspective 
-------------------- 
 
¶2. (SBU) Boeing Japan President Nicole Piasecki and Director 
of Government Relations Gary Konop met with EMIN and 
Commercial Attache July 18 regarding Boeing's concerns that 
EU governments may be inappropriately intervening with 
Japanese entities in connection with ANA's recent request for 
proposals (RFP) for five aircraft, with an option for buying 
three more.  The RFP follows both announcements that Boeing's 
delivery of 787s will be delayed to ANA as well as a 
Japanese/French joint economic communique issued during 
French PM Fillon's April visit to Japan.  That communique 
contained language noting French hopes that "European 
companies in the aviation sector" would capture a share of 
the Japanese market comparable with that they hold in global 
markets (Boeing now holds about 90 percent of the passenger 
aircraft market in Japan, much higher than its share 
globally) and that France welcomed Japan's aspirations in 
developing a medium-sized regional passenger jet.  (NOTE: 
When emboffs asked METI and MOFA officials about the 
communique in April, they said the language had been inserted 
by the French side, something they had initially resisted but 
finally agreed to as "harmless."  End note.) 
 
¶3.  (SBU) Piasecki noted Boeing is working closely with ANA 
to manage any damage to the long-standing relationship 
between the two companies that might have resulted from the 
announcement earlier this year of significant delays in 
production/delivery of the new 787 to ANA and other carriers. 
 She also noted the strong strategic relationship with 
Mitsubishi Heavy Industries, the Japanese company developing 
the new medium-sized regional jet, which is a key partner in 
producing Boeing's 787.  Regarding the ANA RFP, Boeing is not 
entirely sure of ANA's intentions.  She sees the Japanese air 
carrier as having three options: purchase the Airbus 380, 
purchase the Boeing 747-8, or purchase no large aircraft at 
this time.  Given high fuel costs and the global economic 
picture, the business option ANA might well choose is to 
purchase no additional large aircraft.  She noted Japanese 
media reports that ANA might seek to "punish" Boeing for 
delays in delivery of the 787 aircraft, but suspects ANA is 
"too savvy" to allow that issue to affect the current RFP. 
Still, she has heard reports that the Chairman of ANA's Board 
of Directors is taking an unusual role in ANA's internal 
discussions about the aircraft purchases, one that is more 
favorable to Airbus, and that this position may result from 
political pressure. 
 
¶4.  (SBU) Nevertheless and given EU governments' actions on 
behalf of Airbus elsewhere, including the April joint 
Japanese/French economic communique, Boeing believes it needs 
to be watchful and that it is necessary to be ready to 
counter further EU government engagement on Airbus' behalf. 
Boeing has applied to the Department of Commerce for USG 
advocacy in making the point that decisions on whether to 
purchase aircraft and what kinds need to be made on a 
commercial basis and without governments' interference.  She 
also asked that Emboffs inquire, as appropriate, regarding 
ANA's -- or Japanese air carriers' -- plans as well as noting 
the need for making aircraft purchase decisions on a 
commercial basis.  Piasecki insists ANA should approach the 
purchase of new aircraft strictly as a commercial decision 
 
TOKYO 00002056  002 OF 002 
 
 
free from political pressure or inducements, and emphasized 
Boeing is not requesting advocacy letters from U.S. 
government officials nor that external pressure be applied to 
GOJ or to ANA through the GOJ. 
 
¶5. (SBU) Given the high percentage of Japanese content in 
Boeing aircraft (reftel) and Boeing's history in Japan, 
Piasecki said, "Boeing and Japan are one."  Nonetheless, 
Boeing has begun a campaign to emphasize the merits of the 
747-8, including meetings with Diet members to inform them of 
Boeing's activities. 
 
----------------- 
ANA's Perspective 
----------------- 
 
¶6.  (SBU) The same day as the Boeing meeting, Econoff met ANA 
International and Regulatory Affairs Vice President Kazuyuki 
Iwakata, Director Hitoshi Kawahara, and Senior Manager 
Toshiyuki Urushibara.  Iwakata said ANA is "in a bind" about 
the delays in delivery of the Boeing 787.  The airline 
planned to use two of the fuel-efficient B-787s at the July 
G8 Summit and the Olympics to market ANA as an "eco-airline," 
but the delay ruined those plans.  Now ANA has no easy 
solution and remains in a difficult position, Iwakata stated. 
 
 
¶7. (SBU) Iwakata confirmed ANA launched a project team in 
July to consider three options regarding purchases of large 
aircraft (the Airbus 380, Boeing 747-8, and no purchases at 
all).  When Econoff asked about the team's deadline, Iwata 
explained there would be no quick decision but emphasized 
media reports linking the RFP with the delayed 787s are 
untrue.  ANA, he insisted, will make a decision based on 
economic factors. 
ZUMWALT