Japan Airlines ordered the first plane in the country to be made by Airbus on Monday. This is a big entry considering that this aviation market is largely dominated by Boeing. Airbus is capitalising on the ‘not so impressive’ entry of 787 Dreamliners.
The $9.5b deal involves the delivery of 31 wide body A350 jets. The deal was not without a fight since there were many plane makers trying to secure the deal considering that JAL and ANA are trying to venture into new long haul destinations within the ten years.
The deal has greatly affected the local aerospace industry considering that some of the Boeing’s components are made in Japan. As part of the deal, JAL has an option to order another 25 A350 jets, which means the aviation industry in Japan will miss that opportunity.
On the other hand, Airbus stands to gain tremendously as Boeing becomes the loser following the multi-billion dollar deal according to Scott Hamilton, an aerospace analyst at Leeham Co in Seattle.
Scott also added that this comes as good news to Airbus, which has been fighting to break into Boeing’s market, which has been under monopoly. He was keen to note that Boeing has been deliberately frustrating Airbus’ effort of breaking into the Japanese market especially with JAL and ANA.
Among the factors that has made Boeing dominate the aerospace market by 80percent in Japan are the close political ties between Washington and Tokyo coupled with close links with all major suppliers in Japan.
Failure to deliver the 787 Dreamliner on time coupled with tarnishing of brand image due to battery malfunction-overheating, has been good news to Airbus because people no longer believe in Boeing as being able to deliver aircrafts within schedule. With ANA and JAL being buyers of Dreamliner, this was a huge blow to Boeing’s dominance in Japan.
On the other hand, JAL no longer has direct political affiliations like in the past, which means its decisions are not influenced by the political climate. In fact, it now has strained relations with the government with some people claiming it is sometimes treated unfairly when landing at Henada Airport.