JAL breaks with Boeing in US$9.5 bil. Airbus order
By Yuri Kageyama, APTOKYO--Japan Airlines is buying its first-ever jets from Airbus in a deal with a list value of 950 billion yen (US$9.5 billion). The purchase of 31 A350 planes deals a blow to U.S. rival Boeing, which had been JAL's star supplier for decades.
October 8, 2013, 12:08 am TWN
Airbus Chief Executive and President Fabrice Bregier and Japan Airlines President Yoshiharu Ueki signed the deal Monday in Tokyo, which includes an option for JAL to buy 25 more Airbus planes. They declined to give the actual price tag on the deal.
Ueki said the decision to turn to the European manufacturer, based in Toulouse, France, for replacements for retiring Boeing 777 jets was unrelated to the problems that have plagued Boeing's rival offering, the 787 Dreamliner planes.
The 787 jets were grounded for four months earlier this year to confirm their safety after their lithium-ion batteries overheated. The batteries are now encased to prevent overheating from spreading.
The 787 development was also repeatedly delayed, frustrating JAL as well as rival All Nippon Airways, Japan's other major carrier.
“We are sorry for the troubles we have caused our customers with the 787, but the decision on the aircraft was considered separately from that issue,” Ueki told reporters.
He repeatedly said the A350 was chosen because it was the “best match for our needs.”
He brushed off concerns about the additional training JAL pilots will need to fly Airbus planes, which they are not used to. Even after taking such costs and risks into account, the A350 was the best choice, he said without giving specifics.
Airbus and Boeing have for years waged a no-holds-barred slugfest in markets around the world. This commercial battle has also spilled over into a years-long legal fight at the World Trade Organization between the two plane makers over government subsidies or other forms of state aid.
Lately the battle has focused on sales of the next generation of long-range, wide-bodied jets. In that matchup, Monday's order represents a big blow landed by Airbus A350 against Boeing's 787.
Behind the domination of Chicago-based Boeing Co. are the historical ties between Japan and the U.S., including security arrangements. But in recent years, other Japanese carriers, especially the newer low-cost airlines, have been gradually switching to Airbus.
Boeing said Monday's deal did not hurt its relationship with JAL.