Tue, Oct 08, 2013 - Page 15 News List

Airbus clinches landmark order with Japan Airlines

TAKING FLIGHT:The deal and its impact on wide-body competition are likely to dominate a major aviation industry gathering in Barcelona this week, experts said

Reuters, BARCELONA, Spain, and TOKYO

Airbus chief executive Fabrice Bregier, left, and Japan Airlines president Yoshiharu Ueki, center, prepare for a photograph session during their joint news conference in Tokyo,
Japan, yesterday.

Photo: Reuters

Airbus announced its first jet order from Japan Airlines Co Ltd (JAL) yesterday, breaking open the last major aviation market dominated by rival Boeing Co 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 US$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 [Holdings Inc].”

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 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 are major Dreamliner buyers.

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, experts said.

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 about 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, said Ryosei Nomura, a spokesman for the airline.

“This is Airbus’ largest order for the A350 so far this year and is the largest ever order we have received from a Japanese airline,” Fabrice Bregier, chief executive of EADS subsidiary Airbus, said on a conference call. “I must say that achieving this breakthrough order and entering a traditional competitor market was one of my personal goals.”

Boeing said it was disappointed, but respected JAL’s decision.

“We have built a strong relationship with Japan Airlines over the last 50 years and we look to continue our partnership going forward,” a company spokesman said via e-mail.

ANA chief executive Shinichiro Ito said last month that his airline would consider possible delivery delay risks when choosing replacements for its older long-haul 777 jets.

With the world’s biggest fleet of Dreamliners and the first to fly the innovative carbon composite plane, ANA has been most affected by delays and the aircraft’s grounding this year resulting in millions of dollars of losses.

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