Airbus chief executive Fabrice Bregier and JAL president
Yoshiharu Ueki pose with a model of A350 airplane.
Airbus wins landmark Japan deal for 31 jets
Tokyo, October 7, 2013
Airbus announced its first jet order from Japan Airlines Co on Monday, breaking open the last major aviation market dominated by rival Boeing after delays and a grounding of its 787 Dreamliner cast a shadow over its reliability as a supplier.
The landmark deal for 31 wide-body A350 jets with a combined $9.5 billion list price follows an intense battle between the planemakers as Japan's two top carriers seek dozens of new long-haul jets over the next decade.
The agreement includes options for another 25 of the A350s, bringing the potential size to 56 aircraft.
"This is a huge win for Airbus and a big loss for Boeing," said aerospace analyst Scott Hamilton, managing director of Seattle-based Leeham Co.
"Airbus has been trying to break the wide-body monopoly of Boeing for decades and likewise Boeing has been wanting to keep Airbus out of JAL and ANA."
US planemaker Boeing has long seen off attempts by Airbus to secure an order with JAL, benefiting from links with Japanese suppliers and deep political ties between Tokyo and Washington to maintain a market share of more than 80 percent.
Delays to its 787 Dreamliner and its subsequent grounding after its batteries overheated have, however, tarnished its image and cast doubt on Boeing's ability to deliver aircraft on time, industry experts said. Both JAL and its domestic rival ANA Holdings Inc are major Dreamliner buyers.
At the same time, bureaucratic and political influence over the fleet purchases of JAL, which the government bailed out in 2010, has waned since it went public again a year ago and the Democratic Party government that rescued it lost power.
"This is seriously bad for Boeing. They need to do a little soul searching," said Richard Aboulafia, airline analyst with the Virginia-based Teal Group. "(The 787 problems) inevitably led to doubts about execution, resources and time."
The deal, in which the A350 vied with Boeing's yet-to-be-launched 777X, and its impact on wide-body competition are likely to dominate a major aviation industry gathering in Barcelona this week.
JAL's new Airbus aircraft will begin entering into service in 2019, the companies said.
The battle between the two aircraft makers will now shift to ANA, which is also looking for around 25 new jets to replace its aging fleet of long-haul Boeing 777s from 2020.
ANA is still gathering information on the 777X and the A350, Ryosei Nomura, a spokesman for the airline, said. - Reuters