Airbus clinches landmark order for 31 jets with Japan Airlines

Monday 07 October 2013 18.46
Japan Airlines orders 31 A350 jets from Airbus
Japan Airlines orders 31 A350 jets from Airbus

Airbus announced its first jet order from Japan Airlines today.

This breaks 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.

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%.

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 ontime, industry experts said. Both JAL and its domestic rival ANA Holdings are major Dreamliner buyers.

At the same time, bureaucratic and political influence over the fleet purchases of JAL, which the government bailed out i n2010, has waned since it went public again a year ago and the Democratic Party government that rescued it lost power.

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, a spokesman for the airline said.

"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.

"I must say that achieving this breakthrough order and entering a traditional competitor market was one of my personal goals," he added.

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.

If they chose Boeing's 777X, both JAL and ANA would have to commit to being a launch customer again for a new Boeing jet.

Delays to the 787, which is one-third built in Japan, and its subsequent grounding may have made JAL wary of buying a planet that Boeing has yet to officially commit to building. That concern has given Airbus a rare opening in Boeing's best market.

Helping Airbus's sales pitch have been orders for its A350s from customers such as Cathay Pacific Airways, Singapore Airlines, Qatar Airways, Emirates Airline and Deutsche Lufthansa. The base model of the A350 enters service in 2014.

Boeing, which is working on deals with Gulf carriers, also counts Lufthansa as a customer for its 777X.