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Airbus is having a banner day; two orders from major Asian airlines for 65 aircraft.
The first order came from Japan Airlines (JAL) with 42 aircraft. The order breaks down to ten for Boeing (787-9), 21 A350-900s (one is to replace the A350 destroyed in the recent crash), and 11 A3231neos.
The second order from Korean Air is for 33 (six A350-900 + 27 A350-1000) and is the airline’s first A350 order. This order is significant because Korean Air traditionally buys Boeing widebodies. Korean Air and Asiana will merge as the deal has received the necessary approvals. Asiana already operates 15 A350s, providing the merged airline with a ready pool of trained pilots.
Together, the deals are valued at around $26Bn.
These deals are significant because Airbus is winning at the larger end of aircraft sizes, the arena where Boeing has been the market leader. If the 777-X had been ready, these deals might not have gone as they did.
Winning an order for the 787-9 at JAL is noteworthy because it has proven to be the most demanded model in that family. In other words, it is Boeing’s best card for the widebody market for that segment. JAL operates 22 787-9 and 30 787-8. JAL also operates 13 777-300ERs, having retired its last 777-200ER last year. The A350s are going to replace 777s at JAL, plus enable fleet growth.
The JAL A321neo order is also a signal event: Boeing’s MAX equivalent is uncompetitive, and deliveries are uncertain. That order was Airbus’ to lose. JAL operates 41 737-800s and has 21 MAX 8 on order. It is not as though JAL is unfamiliar with the MAX and its strong fuel efficiency.
At Korean Air, the fleet includes 29 777-300s and 12 787-9s. The A350s will replace the 777s and enable growth. The A350-1000 is likely to replace the A380s and 747-8s. The next show to drop at a combined Asian and Korean will be the A330s. Korean has 21, and Asiana has 15. This fleet replacement is going to pit the 787 against the A330neo. The advantage of the A330neo is the pilot training and the potential for faster deliveries. We published an analysis of these two in 2018.
Possibly, the biggest takeaway from these two deals is its reflection of the instability of the duopoly, which is not a good thing at all.
