TOKYO (AP) — Airbus secured its first-ever order from Japan Airlines on Monday, in a deal that undermines Boeing’s long-held dominance of Japan’s aviation market.
Japan Airlines is to buy 31 A350 planes from the European aircraft manufacturer. The purchase has a list value of 950 billion yen ($9.5 billion) and marks a big change in policy as Boeing had been JAL’s major supplier for decades. JAL also has an option to buy 25 more Airbus planes.
No official price was given, but airlines usually get discounts on the list price when making big orders. Some analysts even think that JAL may be getting the planes at below cost as Airbus looks to make inroads in a part of the world that has been primarily Boeing’s domain for decades. Since the end of World War II, the U.S. and Japan have been big trading partners.
The deal could have a big impact in southwest Ohio. Airbus has two key research and supply agreements with the National Composite Center in Kettering, and Ohio has more Airbus suppliers than any other state, the company has said. The company spends some $5 billion with Buckeye State suppliers annually.
Amid much fanfare, Airbus Chief Executive and President Fabrice Bregier and Japan Airlines President Yoshiharu Ueki signed the deal in Tokyo in Monday. Ueki said the decision to turn to the Toulouse, France-based manufacturer for the replacement of its retiring Boeing 777 jets is unrelated to the problems that have plagued Boeing’s rival offering, the 787 Dreamliner.
Earlier this year, the 787s were grounded for four months to confirm their safety after several of their lithium-ion batteries overheated. The batteries are now encased to prevent any overheating from spreading.
The 787’s launch also was repeatedly delayed, with it finally making its entry into service in 2011, 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 long-range, twin-engine wide-body A350 was chosen because it was the “best match for our needs.”
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 yearslong legal fight at the World Trade Organization between the two plane makers over government subsidies or other forms of state aid.
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