Bloomberg News

Airbus Targets Doubling Japan Market Share in Boeing Challenge

October 21, 2013

Airbus Targets Doubling Japan Market Share in Boeing Challenge

Fabrice Bregier, chief executive officer of Airbus SAS, left, looks at a model of an Airbus A350 aircraft as Yoshiharu Ueki, president of Japan Airlines Co. (JAL), speaks during their joint news conference in Tokyo, Japan. Photographer: Akio Kon/Bloomberg

Airbus SAS (EAD), which won its first order from Japan Airlines Co. (9201) this month, intends to double its market share in the country by 2020 as air travel demand climbs.

The European manufacturer’s planes will make up 25 percent of Japanese airline fleets within seven years, from 13 percent currently, Airbus Chief Executive Officer Fabrice Bregier said in a speech in Tokyo today. The planemaker aims to double that again to 50 percent in 20 to 25 years, he said.

Airbus’s agreement, valued at $9.5 billion at the time, to supply Japan Airlines with 31 long-range A350s follows a 2010 order from Tokyo-based Skymark Airlines Inc. (9204) for the A380 superjumbo in a country that Boeing Co. (BA:US) has dominated for decades. Single-aisle jets from Airbus were also chosen by all three low-cost carriers that started flying in Japan last year.

“Asia will be center stage for our business in coming years,” Bregier said at The 15th Nikkei Global Management Forum. We are emphasizing “the importance of getting close to growth markets,” he said.

Airbus, based in Toulouse, France, will also reach 50 percent market share in China next year, from 30 percent in 2005 and 5 percent in 1995, Bregier said.

Japan Airlines ordered 18 A350-900 aircraft and 13 larger A350-1000s, JAL President Yoshiharu Ueki told reporters this month. The carrier also has an option to buy 25 more planes.

ANA Shopping

ANA Holdings Inc. (9202), the nation’s largest carrier, is considering whether to buy Airbus A350s or the new generation 777s to replace its current wide-body 777-300Rs, the company’s president, Shinichiro Ito, said in an interview last month.

The JAL order is Airbus’s biggest for the A350 this year.

The A350 had its maiden flight earlier this year and the first variant is set to enter service in 2014, with the largest model slated for late 2017. The planemaker has said the A350-1000 will offer 25 percent better operating economics than Boeing’s 777-300ER.

The Chicago-based planemaker has integrated Japanese manufacturers into its supply chain over decades in the country, with ties stretching back to the country’s post-World War II reconstruction.

Japanese companies designed and supplied 35 percent of the structure of the 787, with Mitsubishi Heavy Industries Ltd. supplying the wings and Kawasaki Heavy Industries Ltd. and Fuji Heavy Industries Ltd. building part of the front fuselage section and center wing boxes.

Airbus buys about $1 billion of parts and materials annually at manufacturing partners in Japan, Bregier said, and the company is interested in increasing its suppliers in the country.

JAL had 166 Boeing jets, making up 78 percent of its 214- plane fleet, at the end of June, while ANA had 199 Boeing jets, or 84 percent of its fleet of 238 planes, as of Sept. 20, according to separate figures from the companies.

To contact the reporter on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • BA
    (Boeing Co/The)
    • $123.2 USD
    • -1.20
    • -0.97%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus