Military

Boeing Losing Its Grip on Japan

Airbus A321neo
Airbus Group NV
All Nippon Airways (ANA), Japan’s largest airline, has ordered 40 new planes worth $13.3 billion from Boeing Co. (NYSE: BA). At the same time, ANA ordered 30 aircraft from Boeing rival Airbus worth about $3.5 billion. Values are given at list prices, but ANA is not paying that amount.

The order for the Airbus planes may be the first significant fallout from the grounding of Boeing’s 787 Dreamliner last year. ANA and Japan Air Lines (JAL) both suffered from that grounding.

ANA has not purchased planes from Airbus since the 1990s, according to a report at Bloomberg News. Then last year Boeing lost a $9.5 billion order from JAL to Airbus. Boeing has had a near monopoly on aircraft sales in Japan for more than 60 years.

ANA is purchasing 14 Boeing 787-9s, 20 Boeing 777-9Xs and six Boeing 777-300ERs to be delivered between 2017 and 2027. Once all the 787 Dreamliners are delivered, ANA will have 80 of the planes in its fleet and will be the world’s largest operator of the aircraft. The airline was the first customer for the troubled Dreamliner.

The contract with Airbus calls for seven of the company’s A320neo models and 23 A321neo planes to be delivered between 2016 and 2023. These planes are the smaller, single-aisle models comparable to Boeing’s new 737 MAX.

ANA’s fleet consisted of 198 Boeing planes, 84% of its total 236 planes, and just 16 Airbus planes. After these contract announcements, Airbus said its share of ANA’s fleet will rise to 25% by 2020. If and when Airbus can win wide-body contracts with ANA — the 787 and 777 are both wide-bodies — Boeing’s grip on Japan will truly be over.

JAL, Japan’s second largest airline, did order 31 wide-bodies from Airbus last year. That order also includes an option for 25 additional planes. ANA certainly will be watching the performance of the A350s and comparing it to the company’s own experience with the Boeing 787s and 777s when it comes time to place the airlines’ next order.

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