Analysis: The ties that bind - Boeing unlikely to suffer Japan fall-out over 787 woes

Fri Jan 18, 2013 2:59am EST
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By Tim Kelly

TOKYO (Reuters) - Decades of deep business ties between Boeing Co and Japan and the thousands of jobs that depend on them mean Japan will likely keep rewarding U.S. manufacturers with the bulk of its aviation spending.

Boeing's 80 percent share of commercial airline sales in Japan is unrivalled. In every other major market, including the United States, the U.S. planemaker's share is around half, with the rest going to European rival Airbus.

The health of Japan's aerospace industry - dismantled by the United States after Tokyo's defeat in World War Two - has long been intertwined with the fortunes of Boeing's commercial jetliners and the 787 Dreamliner in particular.

The Dreamliner, grounded globally this week after a series of mishaps including an emergency landing of an All Nippon Airways domestic flight, is around one third made-in-Japan.

"If you've been driving on the right, you don't want to shift to the left," said an aerospace industry official in Japan who didn't want to be named due to the issue's sensitivity. He said that, unless it became really serious, the 787's problems were unlikely to decouple Japan from Boeing.


Flag carrier Japan Airlines Co Ltd has never bought an Airbus plane, and ANA was the first to fly the 787. ANA was also a launch customer for Boeing's 777 and is the biggest international operator of the U.S. firm's 767 passenger jets.

Those Japan-Boeing ties were initially spurred by trade diplomacy when Japan was the target of U.S. protectionist ire two decades ago because of Tokyo's massive trade surplus. Japanese airlines buying a few 747 jumbo jets could help re-tilt some of that balance.   Continued...

U.S. Federal Aviation Administration (FAA) technical advisor Eric West (L) inspects All Nippon Airways' (ANA) Boeing Co 787 Dreamliner plane which made an emergency landing on Wednesday, at Takamatsu airport in Takamatsu, western Japan January 18, 2013. REUTERS/Issei Kato