VZCZCXRO0346
OO RUEHFL RUEHKW RUEHLA RUEHROV
DE RUEHBM #0608 2131203
ZNY SSSSS ZZH
O 311203Z JUL 08
FM AMEMBASSY BUCHAREST
TO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 8548
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE IMMEDIATE

S E C R E T BUCHAREST 000608 
 
SIPDIS 

 

STATE PLEASE PASS TO EUR/CE ASCHEIBE 

COMMERCE PLEASE PASS TO ITA KNAJDI 

 

E.O. 12958: DECL: 07/30/2018 

TAGS: EAIR ECON PGOV RO
SUBJECT: ROMANIA: BOEING SETS UP FOR A 1 BILLION DOLLAR DEAL 

 

REF: BUCHAREST 362 

 

Classified By: DCM Jeri Guthrie-Corn for reasons 1.4 (b) and (d). 

 

 ¶1. (C/NF) Summary.  The Regional Boeing sales representative 

advised the Ambassador of plans for a multi-plane deal to 

sell new Boeing 737s to TAROM, the Romanian state owned 

airline.  From Boeing's perspective the 737s fit naturally 

into TAROM's existing fleet structure and will support 

TAROM's future expansion plans.  Operationally and 

strategically, Boeing believes that 737s are a better fit for 

TAROM than the competition.  The deal could result in selling 

up to ten aircraft plus additional options to TAROM and 

Boeing is valuing the potential deal at close to USD 1 

Billion.  However, Boeing is worried about reports that EADS 

does not plan to compete fairly and that they may attempt to 

improperly influence key government officials to favor Airbus. 

 

¶2.  (S/NF) In a meeting on July 25th with the Ambassador, the 

regional Boeing representative, Monte Frazier, shared an 

allegation that EADS may have offered 3 percent of the sales 

price of any eventual Airbus purchase as bribes to officials 

in the Romanian Government.  Frazier has been a frequent 

visitor to Bucharest over the last several months, and 

recently helped Romanian low-cost carrier Blue Air complete 

the purchase of several next generation 737 aircraft.  He has 

built good contacts with the senior management of TAROM and 

believes that these managers are favorably inclined toward 

purchasing 737s from Boeing.  However, these same TAROM 

managers preferred to wait until they were able to meet 

privately with senior Boeing executives outside of Romania at 

the Farnborough Air Show to report allegations that officials 

in the Ministry of Transportation and the Prime Minister's 

office have been offered bribes to force TAROM to buy new 

aircraft from EADS. 

 

¶3.  (SBU) The business rationale for TAROM to choose Boeing 

is considerable.  reftel reported on TAROM's hodgepodge fleet 

mix, which includes B-737s, A-310s, A-318s, plus smaller 

regional turboprops.  TAROM has subsequently signed a lease 

deal for four new 737 aircraft to fill immediate fleet needs. 

 This will make 737s the predominant aircraft type in the 

fleet when the new leased planes enter service.  According to 

Boeing, the range, size, and fuel efficiency of 737s make 

them the best possible aircraft for a regional carrier like 

TAROM.  As an added benefit, the parts and flight crew 

certifications are standardized across the 737 line, making 

an exclusively 737 fleet cheaper and more flexible from an 

operations standpoint.  TAROM is already able to offer a full 

suite of 737 repair services at their certified maintenance 

facility, which provides additional cost justifications for 

sticking with the 737 airframe. 

 

¶4.  (C/NF) Comment.  Post has offered our support to Boeing 

and agreed to advocate for Boeing with the GOR, when it 

becomes appropriate, to ensure that Boeing's eventual bid is 

given all due consideration.  Setting aside allegations of 

bribery, the political pressure on Romania to pick a European 

airframe is considerable.  The fact that 4 leased Boeing 

planes have been added into the fleet, may actually lend 

weight to the argument that it is now Airbus's turn to garner 

a sale, despite the fact that a mixed fleet raises costs and 

creates operational difficulties for TAROM.  Boeing seems 

prepared to make the argument that 737s make the most 

business sense for TAROM, and they are planning on an all-out 

effort to ensure their eventual success in concluding a sale. 

 Post plans to assist Boeing to ensure that the eventual 

competition is fair and transparent.  The fact that TAROM is 

wholly state-owned unfortunately injects politics into what 

should be a straightforward business decision.  End Comment. 

TAUBMAN