Once again, a Japanese airline has come through with much-needed good news for Boeing, boosting the 7E7 order book. Boeing announced late last night an order from Japan Airlines...
Once again, a Japanese airline has come through with much-needed good news for Boeing, boosting the 7E7 order book.
Boeing announced late last night an order from Japan Airlines (JAL) for 30 7E7s, with an option for 20 more.
Most Read Business Stories
- Facing populist assault, global elites regroup in Davos
- Boeing overhauls quality controls: more high-tech tracking but fewer inspectors
- 5 investment tips from Vanguard founder John Bogle
- Alaska Airlines flight diversion leads to a 30-hour nightmare for passengers WATCH
- King County property tax bills are coming, and the housing market slowdown won't lower your bill
At list prices, the firm order would be worth about $3.6 billion, although a steep discount is typically given to early customers.
The new jet was launched in July with a 50-plane order from All Nippon Airways (ANA), also of Japan.
JAL will take a combination of versions of the new plane, including the 7E7-8, seating 217 passengers and with a range of 8,500 nautical miles.
In the face of much skepticism after a slowdown in orders, Boeing this month had reiterated its target of 200 orders for the 7E7 by year end. Before the JAL news, it had announced 82 orders of which only 56, including the massive ANA launch order, were firm contracts.
The order from JAL leaves Boeing still well short of the target, but closer than had seemed possible just last week.
On Dec. 10, Airbus decided to formally offer for sale a rival midsize plane, dubbed the A350, that would launch two years after the 7E7. Some analysts suggested that airlines might hold off on 7E7 orders until they could get specific details of what the Airbus alternative would look like.
But the Japanese, solid Boeing customers, are not waiting for Airbus.
JAL is Japan’s largest airline and the largest customer for Boeing twin-aisle airplanes. As of January of this year, it operated 78 Boeing 747s, 32 Boeing 767s, and 26 Boeing 777s.
The 7E7 is a midsize twin-aisle and is marketed as a replacement for the 767.
As of January, JAL also operated 33 Airbus A300s, inherited from its takeover with Japan Air Systems. These jets are prime candidates for replacement by Boeing airplanes.
A big contributing factor to the Japanese loyalty to Boeing is the level of industrial partnership with Japanese manufacturers that the commercial airplane unit has built up over 35 years.
Three giants of Japanese manufacturing — Mitsubishi Heavy Industries (MHI), Kawasaki Heavy Industries (KHI) and Fuji Heavy Industries (FHI) — worked with Boeing to develop the 767 from that jet’s inception in 1978.
They supply fuselage panels, aerodynamic fairings, landing-gear doors and inspar ribs — approximately 15 percent of the value of the 767 airframe.
The three are also program partners on the bigger 747 and 777 widebody jets.
On the 7E7 program, the Japanese heavies will both design and build about 35 percent of the airframe.
The wings will be made by Mitsubishi; Fuji will provide the center wing box; Kawasaki will provide part of the forward fuselage, the main landing-gear wheel well and the main wing fixed trailing edge.
Other Japanese firms are doing smaller 7E7 work packages.
Bridgestone of Japan will supply the 7E7’s tires.
Toray Composites (America), a Tacoma-based subsidiary of Japanese chemical conglomerate Toray Industries will provide all of the plasticized carbon-fiber-composite raw material from which most of the 7E7 airframe will be constructed.
The good news for Boeing follows the latest in a string of Airbus order coups that had resulted in a shake-up in the Boeing sales team.
On Dec. 4, chief salesman Toby Bright was replaced after Boeing lost crucial order battles.
Last week, AirAsia, a fast-growing, low-cost airline in Malaysia, announced an order for 40 Airbus A320s.
In November, European low-cost carrier Air Berlin ordered 70 A320s. Both carriers had previously operated all-Boeing 737 fleets.