Yoshiharu Ueki (right), President of Japan Airlines (JAL), and Fabrice Bregier, President and Chief Executive Officer (CEO) of Airbus show a model of JAL-painted Airbus A350 at a news conference in Tokyo, yesterday.
TOKYO: Airbus yesterday announced a $9.5bn deal with Japan Airlines, its first jet order from the carrier, challenging Boeing’s dominance in the Japanese market as it struggles with the troubled Dreamliner.
The airline said it was ordering 31 planes — 18 long-haul A350-900s and 13 A350-1000s — with an option to buy another 25 aircraft.
The new planes are to come into service from 2019 as Japan Airlines (JAL) replaces its ageing Boeing fleet, in a blow for the US plane manufacturer.
Airbus chief executive Fabrice Bregier called the deal a “breakthrough” after the firm redoubled its efforts to penetrate a market long dominated by Boeing — Airbus has a 13 percent share of the Japanese market.
“Just being in Japan wasn’t enough,” Bregier said in an exclusive interview.
“We had to build and strengthen trust, prove that Airbus was a leading player, a world leader that has mastered its technology.”
Investors cheered reports of the purchase earlier yesterday with JAL’s Tokyo-listed shares closing 3.01 percent higher at 5,810 yen. The deal was formally announced after markets closed.
The push by the European planemaker comes as JAL and domestic rival All Nippon Airways (ANA) — whose fleet is also dominated by Boeing — have been hit by problems with the Dreamliner.
The lightweight plane — hailed for its fuel-efficiency but marred by years of production delays—was grounded globally in January after lithium-ion batteries overheated on two different planes, with one of them catching fire while parked.
The Japanese carriers, which are the single biggest operators of the Dreamliner, have put their fleets back into service. But they are seeking compensation from Boeing for a string of problems which forced them to cancel hundreds of flights and dented their bottom line.
Despite a lengthy investigation, Boeing has not identified the root cause of the aircraft’s battery problems, but said it put safeguards in place to prevent future incidents.
“Considering the recent troubles with the Dreamliner, JAL may have reached the conclusion that it wants to avoid the risks,” said Mitsuru Miyazaki, senior analyst at Tokyo’s SMBC Friend Research Center.
“The aviation sector is a global industry so it’s natural that Japanese airlines want to secure multiple sourcing options.”
However, JAL head Yoshiharu Ueki said the Dreamliner problems were “totally unrelated” to its decision to buy planes from Boeing’s chief rival.
The carrier’s president pointed to the A350’s lightweight materials which help cut down on fuel costs, usually an airline’s single-biggest cost—a feature that Boeing played up with its Dreamliner.
“To put it simply, Airbus’s A350 matched our expectations,” Ueki said.
The value of the JAL-Airbus agreement is based on the planes’ list prices, but airlines typically extract price cuts on big orders.
For Airbus, the deal marks a further push into the all-important Asia-Pacific aviation market, which it has predicted would overtake Europe and North America in air traffic by 2032.