The Airbus A350-900 JAL RR

Japan Airlines became the A350 XWB’s first Japanese customer with a purchase agreement for 31 aircraft – composed of 18 A350-900s and 13 A350-1000s. © Airbus S.A.S 2013

Japan Airlines (JAL) has signed a purchase agreement for 31 Airbus aircraft. The order includes A350 XWBs (18 A350-900s and 13 A350-1000s), plus options for 25 more aircraft. This is also the first order Airbus has received from Japan for the A350 XWB. Delivery will begin in 2019, with the A350 XWBs gradually replacing JAL’s aging fleet over six years.

The agreement is worth 950 billion yen (US $9.5 billion) at published prices, for EADS, the European Union-based owner of Airbus. EADS likely offered JAL deep discounts to earn their business.

Before yesterday’s announcement, US-based Boeing traditionally had been the exclusive provider for JAL and the Japanese commercial airline industry. Boeing is still the dominant carrier in Japan. Japan has a strong manufacturing center for Boeing parts. However, the end of a Boeing monopoly sends several signals. As Japan Airlines company begins diversifying its airline fleet, it breaks the ice for the rest of the Japanese industry to follow JAL’s suit.

The Airbus breakthrough in the Japanese market was Boeing’s to lose. Boeing delayed deliveries of the Boeing Dreamliner 787s or 777Xs to Japanese customers. Several overheated battery incidents – such as the January 2013 JAL Dreamliner electrical fire at Logan International Airport in Boston, Massachusetts – triggered an investigation by the US Federal Aviation Administration (FAA). Both FAA and Japan grounded Dreamliners pending further assurances that the batteries would not overheat.

Boeing and Airbus have intense head-to-head, US vs. EU competition over the “next-generation” of wide-body commercial jet aircraft, which is needed to increase fuel efficiency, increase passenger capacity, and replace the current aging fleet. Although Boeing stock (NYSE:BA) dropped 2.78% from a high of $120 to $116, since the US government shutdown one week ago, Boeing stock is still up 45% from one year ago.

“We will utilize 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,” said Yoshiharu Ueki, President of Japan Airlines. “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.”

It is the first-ever order by JAL with EADS. “We sincerely welcome Japan Airlines as a new Airbus customer and feel honored by this first ever order from Japan for our all-new A350 XWB,” said Fabrice Bregier, President and CEO of Airbus. “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.” EADS is headquartered in Toulouse, France. EADS employs a total workforce of more than 140,000 worldwide, including some 59,000 Airbus employees. EADS provides aircraft such as helicopters, in addition to Airbus, and global services in aerospace and defense.

The Airbus A350-900 JAL RR incorporates a three-class layout to seat over 300 passengers on international routes – as long as 8,100 nautical miles (nm). The A350-1000, the largest Airbus A350, seats 350 passengers up to 8,400 nm. All Airbus A350 XWB models are equipped with the Rolls-Royce Trent XWB engines. The A350 XWB has completed around 300 flight test hours, and is committed to a total of 2,500 hours over the next 12 months. The A350-900 is scheduled to begin commercial service in  the second half of 2014. With this latest purchase agreement, Airbus has over 750 orders for the A350 XWB from 38 customers worldwide.