New Boeing widebody is frontrunner to replace 767s at ANA and JAL as manufacturer prepares for project decision

All Nippon Airways (ANA) and Japan Airlines (JAL) are expected to release tenders for Boeing 767 replacements at the end of this year in a contest to be timed with the formal launch of the Boeing 7E7.

Airbus is preparing to respond with a proposal for Airbus A330-200s, but will be a heavy underdog. Japan is preparing to designate the 7E7 a national project, which would result in government subsidies beginning in fiscal 2004 and would put pressure on ANA and JAL to sign as launch customers.

Japan's last national commercial aircraft project, the Boeing 777 from 1991, resulted in simultaneous orders from ANA and JAL. Boeing's Japanese sales team has begun discussing the 7E7 with both carriers and is confident orders will be placed in early 2004, or two to four months after a request for proposals is issued.

The airlines are waiting for the 7E7 programme to be launched before issuing requests for proposals on new mid-size widebodies. A Boeing board decision on the 7E7 is expected at the end of this year, giving the company authority to begin selling the aircraft.

As part of the pre-launch phase of the programme, a team of five Japanese manufacturers is negotiating a workshare package with Boeing that is expected to be significant enough to merit government subsidies. Japan has informally agreed to provide subsidies if Japanese manufacturers receive a 30-35% airframe workshare.

Japan's ministry of economy trade and industry (METI) is preparing to submit a request for 7E7 subsidies in December as part of its budget request to the ministry of finance for fiscal year 2004. METI says it will seek national project status for the 7E7 and is now determining the volume of subsidies and loans to be provided to manufacturers.

In exchange for national project commitment, the Japan Aircraft Development Corporation (JADC) expects Boeing to give its five member companies at least a 30% workshare. For this to be accomplished, Boeing must accept JADC's proposal to give Mitsubishi the wing, Kawasaki the fuselage and Fuji the centre wing.

Only a few small components of Airbus aircraft are made in Japan and Japanese airlines have traditionally favoured Boeing, including a recent ANA competition that ended in an order for 45 737-700s.

ANA and JAL operate a combined fleet of about 70 767s. JAL has just committed to taking several additional 767s, but sources say these will be leased rather than purchased to give JAL flexibility to switch to the 7E7 in the next decade. Japan Air System also operates more than 30 Airbus A300s, which parent airline JAL is considering replacing with domestic variants of the 7E7.

Source: Flight International