Airbus versus Boeing Japan battle switches to ANA

Wed Oct 9, 2013 4:05am EDT
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By Siva Govindasamy and Tim Hepher

SINGAPORE/TOULOUSE (Reuters) - Stung by the loss of a multi-billion dollar jet order from Japan Airlines (9201.T: Quote) to arch-rival Airbus EAD.PA, Boeing Co (BA.N: Quote) will mount an all-out defense of its position with Japan's other major airline, ANA, a source close to the U.S. planemaker said.

Boeing executives are still trying to understand why long-time customer JAL ordered 31 Airbus A350s - worth $9.5 billion at list prices - in a deal, announced on Monday, that was the U.S. company's first major loss in Japan.

ANA Holdings Inc (9202.T: Quote) wants around 35 aircraft to replace its long-haul Boeing 777s and, like JAL, is considering both the A350 and the Boeing 777X, the re-engined, updated variant of the popular long-range wide-body jet.

After the JAL setback, ANA is fast becoming a "can't lose at any cost" deal for Boeing, whose executives are under pressure to "do everything they can" to win the deal, said an industry source close to the U.S. planemaker.

The United States' close diplomatic ties with Japan, a key U.S. ally in East Asia, could help Boeing's cause, according to industry sources.

But some analysts think ANA will buy Airbus wide-body planes to hedge against delay and avoid getting left with older fleets while competitors fly new jets that consume less fuel. The Airbus A350 is due to enter service in 2015, while Boeing's competing 777X is not expected before 2020.

"For ANA, relying on Boeing for 777-Xs means running the risk that JAL, their direct competitor, will get their A350s as 777 replacements years before ANA does," wrote Richard Aboulafia, analyst at Teal Group in Fairfax, Virginia.

"Therefore, an ANA A350 order is likely."   Continued...

Japan Airlines President Yoshiharu Ueki (R) shakes hands with Airbus Chief Executive Fabrice Bregier during their joint news conference in Tokyo October 7, 2013. REUTERS/Toru Hanai