Japan Air Lines is poised to announce imminently a massive order for narrow-body jet airplanes, and there's reason to believe Boeing has...
Japan Air Lines is poised to announce imminently a massive order for narrow-body jet airplanes, and there’s reason to believe Boeing has won it.
A person in the Japanese aviation industry said that Boeing has bested Airbus for a contract that includes a firm order for as many as 50 jets with options for perhaps 30 more. Deliveries are to start in 2007, he said.
Since mid-October, Japan Air Lines (JAL) has been considering Boeing’s next-generation 737 jet, built in Renton, in competition with Airbus’ A320. A contract of that size would be worth about $3.25 billion to Boeing at list prices.
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Reached in Tokyo late yesterday, JAL spokesman Geoffrey Tudor insisted that the competition to supply JAL’s airplane had not yet been decided. He said the mix of firm orders and options had not been finalized, and that the number cited by the Japanese source was “over the top.”
But he said that an announcement Friday morning Tokyo time — late today in Seattle — is “very possible.”
“I’m sitting here with two press releases,” Tudor said. Asked if one press release announced a Boeing win and the other an Airbus win, he responded: “That’s about it.”
A Boeing spokesman said he had no information about an imminent deal.
According to the Japanese aviation source, who said he learned details from a participant in the negotiations, JAL took final proposals from the two airplane manufacturers a week ago but had then reopened the bidding.
In January, he said, Airbus’ price had been lowest, but Boeing’s price later came down and in the final proposals it offered the better deal.
With JAL’s history of 11th-hour deals, further delay or a last-minute change to the order could not be ruled out, he said.
JAL merged last year with Japan Air Systems (JAS) to equal the size of its rival All Nippon Airways.
JAL now has a fleet of 278 aircraft. Because JAS flew Airbus and McDonnell Douglas jets, while the heritage JAL company flew Boeing jets, the fleet is a mix of many different models. The airline plans to reduce those to create operational efficiencies.
Its narrow-body fleet has 42 older McDonnell Douglas planes and 23 older 737 classic aircraft, all ripe for replacement.
In addition, JAL has big expansion plans.
In December, JAL placed an order for 30 of Boeing’s new mid-size jets, the 787, formerly designated the 7E7.
If the JAL narrow-body order also goes to Boeing, then the U.S. manufacturer will have effectively sewn up the Japanese market.
Yesterday, All Nippon signaled with an order for two 777s and a conversion of two other orders to 777s that it will go with Boeing exclusively for the foreseeable future.
JAL’s fleet-renewal strategy is tied to the forthcoming major expansion at Tokyo’s Haneda airport, the biggest domestic hub in Japan, which handles 70 percent of total domestic air traffic and is currently at full capacity.
Haneda is the sixth-largest airport in the world in terms of passengers passing through.
A fourth runway is expected to be completed in about 2009, giving domestic Japanese airlines a big boost in flight frequencies.
Until now, airlines operating out of Haneda have coped with the congestion by flying big airplanes into the restricted landing slots. With the airport expansion, JAL plans to use smaller airplanes flying new routes.
Dominic Gates: 206-464-2963 or email@example.com