‘Embarrassing, frankly’: Boeing loses major Japanese customer

Oct 7, 2013, 6:09 AM | Updated: 10:02 am

Boeing has enjoyed near exclusivity in Japan since the end of World War II, but now Japan Airlines ...

Boeing has enjoyed near exclusivity in Japan since the end of World War II, but now Japan Airlines has signed its first deal with Airbus, a more than $9 billion deal for 31 of the French manufacturer's new A-350's. (AP Photo/File)

(AP Photo/File)

Airbus has been banging on the door in the Japanese market for decades, and Monday morning Japan Airlines opened it to the Boeing’s European rival in a big way.

Boeing’s dominance in the Japanese market appears to be over.

Boeing has enjoyed near exclusivity in Japan since the end of World War II, but now Japan Airlines has signed its first deal with Airbus, a more than $9 billion deal for 31 of the French manufacturer’s new A-350’s.

This is a game-changer for airplane competition in Japan.

“It’s pretty bad,” aviation analyst Richard Aboulafia said. “It’s pretty embarrassing, frankly.”

Aboulafia said this is a clear message to Boeing that it needs to stop dragging its feet on the 777X, which is expected to officially launch next month in Dubai, and for Boeing to ensure that it won’t have the same problems the 787 has had.

“It was a time for contrition, not resting on your laurels, given the nature of the 787 program,” Aboulafia said. “I think they could have rescued that. They could have said, ‘Hey we did bad, and we’re going to be much more aggressive and focused this time,’ and I don’t think they did that. They were very passive about this program, and this is an extremely serious consequence of that passivity.”

Aboulafia said it’s likely that JAL is simply managing its risk by taking on some Airbus planes, but he said this should be a wake up call at Boeing.

“This is one carrier doing something that’s really a negative comment on how Boeing has comported itself, but on the other hand it’s not the loss of a key strategic ally necessarily.”

But now that JAL has chosen Airbus, it might give All Nippon Airways more confidence in choosing Airbus for its next major purchase. ANA is deciding right now on whether to go with the A350 or Boeing’s 777X. A decision on that is expected in the spring.

Aboulafia said it’s easy to see that ANA might hedge its bets, too.

“I don’t think there’s a risk of ANA defecting altogether, but there’s definitely the risk that they do what JAL has done and hedge risk by buying a couple dozen A350’s, too.”

The Airbus A350 made its first flight in June. It was designed to compete with the 787 and 777. Like its Boeing competition, the plane is made of lighter and more fuel-efficient composite materials.

Airbus expects to deliver its first of these planes next year.

JAL will take its first delivery in 2019.

Japan Airlines said this order has nothing to do with the problems that have plagued the 787, including the more than three years of delays and battery issues that grounded the fleet earlier this year.

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‘Embarrassing, frankly’: Boeing loses major Japanese customer