Airbus 'disappointed' by Japanese carrier's failure to properly evaluate new A350

Japan Airlines (JAL) placed a late-year commitment for 30 Boeing 7E7s after the manufacturer persuaded the carrier to decide on its Airbus A300/767 replacement ahead of ordering new narrowbodies.

Industry sources say Boeing, keen to get at least halfway to its 2004 7E7 sales target of 200 aircraft and counter several December blockbuster deals by Airbus, presented JAL with an enticing offer. Sources say Airbus is upset with the timing of the order because JAL did not have time to evaluate the A350 adequately. Airbus secured authority to offer the A350 in early December, only after bids in response to an October JAL request for proposals (RFP) were due.

JAL says it evaluated "a proposal from Airbus for a medium-size jet replacement" but does not elaborate. Airbus Japan declines to discuss its proposal, saying only it is "disappointed" with the outcome.

The slightly quicker-than-anticipated order could add fuel to the European Union's effort to fight Japanese government subsidies for local 7E7 suppliers. Japanese manufacturers were selected last year to build 35% of the 7E7, which has helped convince All Nippon Airways and JAL to order a combined 80 aircraft, compared with only 32 so far from non-Japanese operators. Government loans to help Japanese manufacturers cover their development costs have not yet been awarded because a long-delayed master programme contract has not been finalised.

Airbus must tread carefully because it is still competing for an expected first-quarter 2005 order from JAL for at least 30 narrowbodies. Airbus views this competition as winnable, unlike its near-zero chance in the widebody campaign.

Boeing was first close to securing a 7E7 order from JAL in 2003 when it gave the carrier an attractive late-year proposal, hoping it could launch the programme at the same time as securing authority to offer the aircraft. But JAL, despite issuing its original A300/767 replacement RFP in October 2003, resisted ordering 7E7s for several months until its financial conditions improved. Having returned to profitability in the half-year ending 30 September, JAL in October 2004 issued new RFPs for both narrowbodies and widebodies, but told manufacturers it would first select between the A320 and the 737-700/800.

JAL says it plans to sign a firm contract for the 30 7E7s plus 20 options in the second quarter and will select an engine within six months. It plans to operate a mix of 7E7-3s and 7E7-8s from 2008 but has not yet specified a breakdown.

Given its current fleet, JAL is likely to operate more -3s than -8s. All 22 of JAL's A300-600Rs and 19 of its 767s operate domestically.



Source: Flight International