Airbus has emerged victorious against its US rival, Boeing, securing substantial orders for 65 jets from two key Asian customers.
This development comes at a challenging juncture for Boeing, which is currently grappling with a complex manufacturing crisis following a mid-flight panel blowout incident involving a 737 MAX 9 jet.
Japan Airlines’ shift towards Airbus
Japan Airlines (JAL) announced a huge deal with Airbus, under which it plans to purchase 21 wide-body A350-900 and 11 A321neo narrow-body jets.
This move marks a departure from JAL’s traditional reliance on Boeing, as it will receive smaller single-aisle jets from the European aircraft manufacturer for the first time.
Additionally, JAL confirmed an order for 10 Boeing 787 Dreamliner jets.
Korean Air’s investment in Airbus A350s
South Korea’s largest carrier, Korean Air, has also placed a significant order with Airbus, signing a deal for 33 A350s valued at $13.7 billion. This landmark agreement represents Korean Air’s inaugural purchase of the A350 aircraft family, as the airline prepares for a merger with Asiana Airlines, another major South Korean carrier (Reuters).
Airbus capitalises on Boeing’s challenges
Airbus has been steadily expanding its market share, particularly in the single-aisle segment, with its fuel-efficient A321neo.
The European aircraft manufacturer’s growth trajectory has been further accelerated by the Boeing 737 MAX crises, which involved two fatal crashes in 2018 and 2019.
Following a recent panel blowout incident on an Alaska Airlines flight, Boeing is currently facing rigorous investigations into its safety and quality standards, leading to regulatory restrictions on its production capabilities.
A source familiar with JAL’s order clarified that the limited Boeing orders were not a direct consequence of the aircraft manufacturer’s ongoing challenges.
However, the potential risk of delivery delays due to these issues prompted JAL to diversify its risk by not relying exclusively on one aircraft manufacturer.
Analyst insights and market dynamics
Reuters cited Richard Aboulafia, a prominent aerospace analyst and critic of Boeing. He commented on Airbus’s growing market presence in Japan, noting that Airbus is effectively capitalising on the market opportunity it gained back in 2013 with the initial A350 order.
Rob Stallard, an analyst with Vertical Research Partners, pointed out that Boeing’s earlier successes with JAL and Korean Air were noteworthy but pointed out that these airlines currently operate a mixed fleet.
According to Boeing’s data, the company maintains a dominant 65 per cent of the in-service market share in Northeast Asia, which includes Taiwan, Korea, and Japan.
Despite this, the recent orders from JAL and Korean Air indicate a shifting landscape in the aviation industry, with airlines increasingly seeking alternative options to meet their fleet requirements.
Strong demand for wide-body jets
The recent orders from JAL and Korean Air indicate the strong demand for new wide-body jets, particularly from East Asian and West Asian carriers.
This demand surge is attributed to the nearing full recovery of international travel, following a prolonged downturn due to the COVID-19 pandemic.
Analyst Rob Stallard noted, “It shows that the strong demand for new wide-body jets, particularly from Asian and Middle Eastern carriers, has continued from 2023 into this year. Just like the narrow-bodies, the (aircraft manufacturers) now have no issue with demand – the challenge is supply.”
Future outlook and sustainability goals
JAL’s orders, with expected deliveries between the 2025 and 2033 financial years, have a total catalogue price of approximately $12.4 billion.
The airline also plans to replace an A350-900 that was destroyed in a runway collision at Haneda airport in Tokyo earlier this year.
Korean Air’s order is part of its long-term fleet planning strategy, aiming to replace older aircraft and align with sustainability goals.
Airbus highlights that the A350s use 25 per cent less fuel than similar older-generation planes, offering significant environmental benefits.
(With inputs from Reuters)
