Airbus in $9.5-bn aircraft deal with Japan Airlines

Japan's national carrier, Japan Airlines (JAL), has signed a landmark deal with European aircraft giant Airbus SAS for the purchase of 31 wide body aircraft A350 XWB for approximately $9.5 billion.

The deal, the first ever between the two, brings an end to JAL's five-decades-old relationship with Airbus' arch rival, Boeing Co.

The agreement includes firm orders for 18 A350-900 and 13 A350-1000 jets, plus options for a further 25 airplanes.

Delivery of the Airbus aircraft will begin in 2019, which is expected to gradually replace JAL's ageing fleet of Boeing 777s in its long-haul routes over a six year period.

JAL's president Yoshiharu Ueki said: ''We will utilise the A350 XWB to maximum, which offers high level of operational efficiency and product competitiveness, while positively catering to new business opportunities after slots at airports in Tokyo are increased.''

''In addition to improving profitability with advanced aircraft, we always aim to deliver unparalleled services to customers with the latest cabin and steady expansion of our route network,'' he added. 

Welcoming the new customer and first ever order from Japan for Airbus' all-newA350 XWB, the company's president and CEO Fabrice Bregier said: "It fills us with pride to see a leading Japanese airline start a new chapter with us. This highlights a very bright and flourishing future for both of us, JAL and Airbus.''

Similar to Boeing's advanced 787 airplane, A350XWBs are made of advanced light-weight materials and are designed to achieve improved fuel efficiency over competing aircraft models.

Typically, an A350-900 plane can carry over 300 passengers on routes up to 15,000 km while A350-1000 can seat around 350 passengers and fly over 15,500 km.

The aircraft are powered by the latest Rolls-Royce Trent XWB engines.

The A350-900 is scheduled to enter into commercial service in the second half of 2014. Airbus has over 750 firm orders for A350XWB aircraft from 38 customers worldwide.

Last year, Boeing regained the top spot in new orders surpassing Airbus for the first time in a decade. Although the two rivals have an equal share in China, Asia's largest aircraft market, Boeing has been predominant in Japan, the continent's second-largest market.

According to aviation consulting firm Ascend, Boeing has 428 passenger and cargo planes in Japan compared with Airbus' 61. In China, both have around 950 planes each in operation.

Through this strategic order from JAL, Airbus' will significantly improve its presence in the Japanese aircraft market.

Asia-Pacific aircraft market is expected to heat up in the next two decades which is likely to represent around 35-40 per cent of all new deliveries, with bulk of the orders coming from China, India and South East Asia.

According to some analysts, recent problems with Boeing's 787 aircraft due to battery defects and their subsequent grounding could be reason to tilt the balance towards Airbus.

However, Ueki said the decision had ''nothing to do with that situation,'' and other factors including lower operating costs is the main consideration for the selection.