Barcelona - Airbus will announce its first jet order from Japan Airlines Ltd on Monday, three sources familiar with the matter said, breaking open the last major aviation market dominated by rival Boeing.
Japan's flagship carrier will buy Airbus A350 wide-body aircraft following an intense battle between the planemakers as Japan's two top carriers seek dozens of new long-haul jets over the next decade, the sources said. JAL and Airbus will hold a joint news conference at 06h00 GMT in Tokyo. Neither company said what would be discussed.
The sources gave no details on the number of planes to be sold, but industry analysts previously told Reuters they expected JAL to order around 25 aircraft in a contest that pitted the A350 against Boeing's yet-to-be-launched 777X.
“It looks as though JAL has decided to go with Airbus,” one of the sources said, declining to be identified because of the sensitivity of the matter.
For decades, US planemaker Boeing has seen off attempts by Airbus to secure an order with JAL, benefiting from links with Japanese suppliers and deep political ties between Tokyo and Washington to maintain a market share of more than 80 percent.
Delays to its 787 Dreamliner and its subsequent grounding after its batteries overheated have, however, tarnished its image and cast doubt on Boeing's ability to deliver aircraft on time, industry experts said. Both JAL and its domestic rival ANA Holdings Inc are major Dreamliner buyers.
At the same time, bureaucratic and political influence over the fleet purchases of JAL, which the government bailed out in 2010, has waned since it went public again a year ago and the Democratic Party government that rescued it lost power.
“This is seriously bad for Boeing. They need to do a little soul searching,” said Richard Aboulafia, airline analyst with the Virginia-based Teal Group. “(The 787 problems) inevitably led to doubts about execution, resources and time.”
The expected deal and its impact on wide-body competition is likely to dominate a major aviation industry gathering in Barcelona this week.
In a sign of how JAL's once cosy government ties have become strained, particularly in the wake of its taxpayer-funded rescue, the carrier on Friday complained that it was unfairly treated over landing rights at Tokyo's Haneda airport after ANA received twice as many new slots.
The battle between the two aircraft makers will now shift to ANA, which is also looking for around 25 new jets to replace its aging fleet of long-haul Boeing 777s from 2020.
ANA is still gathering information on the 777X and the A350, Ryosei Nomura, a spokesman for the airline, said.
A deal for around 25 of the A350 aircraft would be worth $7 billion to $8 billion at list prices, depending on the type.
JAL said its president, Yoshiharu Ueki, and Airbus Chief Executive Fabrice Bregier would attend the news conference later on Monday in Tokyo. In France, Airbus said it would give a telephone briefing. A spokesman for EADS subsidiary Airbus declined further comment.
Boeing declined to comment.
If they chose Boeing's 777X, both JAL and ANA would have to commit to being a launch customer again for a new Boeing jet.
Delays to the 787, which is one-third built in Japan, and its subsequent grounding may have made JAL wary of buying an aircraft that Boeing has yet to officially commit to building. That concern has given Airbus a rare opening in Boeing's best market.
“It's the price to be paid for passivity, by not launching this plane one year ago,” said Aboulafia, referring to the 777X.
ANA's boss, Shinichiro Ito, told Reuters last month that his airline would consider possible delivery delay risks when choosing replacements for its older long-haul 777 jets.
With the world's biggest fleet of Dreamliners and the first to fly the innovative carbon composite plane, ANA has been most affected by delays and the aircraft's grounding this year resulting in millions of dollars of losses.
Helping Airbus's sales pitch have been orders for its A350s from marquee customers such as Cathay Pacific Airways, Singapore Airlines, Qatar Airways, Emirates Airline and Deutsche Lufthansa. The base model of the A350 enters service in 2014.
Boeing, which is working on deals with Gulf carriers, also counts Lufthansa as a customer for its 777X.
Japanese suppliers including Mitsubishi Heavy Industries Ltd and Kawasaki Heavy Industries Ltd, which account for one-third of the 787, are expected to join the 777X programme too, although Boeing has yet to say how much work they will get.
JAL's shares rose as much as 3.4 percent in early trade to 5,830 yen, compared with a flat Tokyo benchmark Nikkei average . Market sources attributed the rise to the carrier digging in its heels with a call on Friday for the government to revise its allocation of landing slots at Haneda Airport. - Reuters