Ever since Japan Airlines announced that it was going to get its business back on track, no one has heard much from it. However, that all changed after the chief executive of Airbus, Fabrice Bregier, said that a new agreement between Japan Airlines and Airbus could be worth a staggering $9.5 billion.
This new deal between Airbus and Japan Airlines is record-breaking for a number of reasons. Of course, the most notable reason why this is a record-breaking deal is the simple fact that it is the first deal ever between these two companies.
Although the exact figures of this deal have yet to be announced, Airbus has made it clear that it won an order from Japan Airlines to build 31 A350 planes. This is a deal that will be worth at least $9.5 billion at list price. However, with an order size this big, it is likely that Japan Airlines got a special deal on the order. Plane makers never announce how much of a discount they give to airlines that buy in bulk.
Japan Airlines has chosen the A350 for a number of reasons. However, the biggest reason for choosing this plan is due to how fuel-efficient it is. Fuel prices are becoming very costly for airlines and most are looking for a way to bring down these costs. The best way to do this is to invest in a new fleet of planes. The A350 is viewed as the direct rival of Boeing’s famous 787 Dreamliner. Unfortunately for the Dreamliner, it was hit with technical and safety issues in the past few months. This has caused a lot of airlines to lean towards the A350.
Of course, the thing that Boeing is most concerned about is the fact that Japan Airlines went with Airbus. After all, Boeing had been dominating the Japanese aviation market. Now, Airbus has landed this huge deal, which is going to cut into Boeing’s market share.
Bregier said that Airbus has just received the largest order of A350 planes this year. It is also the largest order that the company has ever received from a Japanese airline and the only order the company has received from Japan Airlines. He added that breaking into new markets is his top goal as the chief executive of Airbus, and he has been able to do just that.
For both Airbus and Boeing, the key to success right now is expanding their market share of a shrinking industry. Due to the slowdown the economy took, airlines are not ordering as many planes. In order to keep numbers up, these companies have to enter into markets in which they previous had only small market shares. This has caused a very intense battle to break out between Boeing and Airbus as they fight for the few airlines that are ordering planes. Currently, it looks like Airbus has the upper hand thanks to its A350.