Boeing eyes more wide-body from Japanese carriers

Despite the recent spate of large widebody aircraft orders by Japanese carriers, there are still opportunities for new contracts with these airlines, according to a senior Boeing executive.
                                                                       
Japan Airlines ordered about 30 Airbus A350s in 2013 with options for 25 more, while earlier this year All Nippon Airways (ANA) ordered 20 777Xs and added to its 787-9 backlog. These deals will cover the long-term replacement of much of their large 777 fleets.

However, “if you look at the installed fleet [in Japan], it still has more replacement to come,” Boeing SVP-sales & marketing for Northeast Asia Ihssane Mounir said. For example, JAL’s A350 orders will not be adequate to replace its 777-300ERs in the long term, Mounir said. So the eventual -300ER replacement “remains an open campaign,” he stated at the Association of Asia Pacific Airlines annual meeting in Tokyo.

ANA is rapidly expanding its international network, and will probably want to top up its existing commitments at some point, Mounir said. Continuing growth in the international market will mean both carriers will probably need to increase their order books.

The Japanese airline market will have to find equilibrium between an emerging low-cost carrier (LCC) sector and mainline carriers, Mounir noted. If trends in other global regions are followed, LCCs may eventually take over a much larger slice of the domestic market, leaving the full-service legacy carriers to focus on long-haul routes. This could be the catalyst for further widebody orders.

Big orders in the Japanese market tend to come in cycles, and it is hard to predict when the next cycle will be, Mounir said. Boeing is not involved in any widebody aircraft negotiations in Japan at the moment, “but we’re keeping our eyes open.”

Regarding the broader Asia-Pacific market, Mounir said worries about over-supply of capacity in the long term are largely exaggerated. Many people in the industry are still underestimating the potential demand from a rapidly growing middle class in Asia, particularly in China.

But while orders in the Asia-Pacific region are not excessive in aggregate, Mounir conceded that the concentration of orders in some specific markets could cause some concern. However, he believes the market will balance out as aircraft capacity is drawn to areas of untapped demand. If further liberalization occurs to facilitate that process, then the current level of orders will be inadequate compared to what could be needed.

(Adrian Schofield - ATWOnline News)