TOKYO (Reuters) - Japan Airlines Corp is considering buying Airbus's midsize A350 XWB planes following production delays to Boeing Co's new 787 Dreamliner, two company sources told Reuters.
By Noriyuki Hirata
TOKYO (Reuters) - Japan Airlines Corp is considering buying Airbus's midsize A350 XWB planes following production delays to Boeing Co's new 787 Dreamliner, two company sources told Reuters.
Boeing faces increasing customer ire after announcing last month a second delay for the 787, pushing first deliveries back to early 2009, about nine months behind schedule. The industry has been watching to see if any airlines would switch to Airbus.
JAL, one of Boeing's most loyal customers, had planned to buy 35 787 Dreamliners with an option for a further 20, hoping to cut costs on parts replacement, maintenance and pilot training by focusing its resources on one aircraft.
!ADVERTISEMENT!But it could be having second thoughts.
"The risk of procuring from one firm for our next-generation planes is large. We should procure from more than one," said a JAL executive who spoke on condition of anonymity.
The sources did not say how many planes JAL might buy from Airbus, a unit of European aerospace company EADS.
"We have always been studying our prospective fleet, including but not exclusively the A350. But nothing has been decided," JAL spokesman Hisanori Iizuka said.
Boeing's delays have added to the problems facing JAL, which lost more than 63 billion yen ($587 million) in the last two business years, hit particularly hard by high oil prices because of its ageing fleet.
The airline embarked on sweeping restructuring last year focused on renewing its fleet with smaller planes like the 787 to improve fuel efficiency, reducing jobs, overhauling its pension system and selling non-core assets.
JAL is also planning to raise about 150 billion yen in fresh capital and is under pressure to boost shareholder returns.
"It shows the firm has begun seriously weighing the pros and cons of single and multiple sourcing," said Hajime Hitotsuyanagi, an analyst at Daiwa Institute of Research.
"Single sourcing would be cheaper if delivery is on schedule or earlier, but the company may have started considering other options, given the delay in the production schedule," he said.
Boeing was not able to say if the latest delay, which it attributed to issues with suppliers, would be the final one.
Boeing and Airbus are the only two competitors in the global market for 100-seat-plus passenger jets. Boeing is ahead in terms of new orders, but Airbus leads in annual production.
Airlines have so far ordered 857 of the Boeing 787 planes, worth $140 billion at list prices, and some are seeking compensation for the postponement.
Japan's All Nippon Airways -- due to be the first to take delivery of the aircraft -- Australia's Qantas, and Air India have said they will consider seeking compensation, which could cost Boeing billions of dollars.
Japan Airlines shares closed on Friday down 0.8 percent at 256 yen. The benchmark Nikkei average fell 1.4 percent.
The airline had a total of 171 Boeing planes in its fleet as of September 2007, according to its financial statements.
It has 22 Airbus A300 or A310 planes in operation, according to Airbus. The planes, which are no longer in production, were bought by Japan Air System, which is now part of Japan Airlines.
(Additional reporting by Edwina Gibbs, Taiga Uranaka, Nathan Layne, Tim Hepher; Editing by Hugh Lawson/Will Waterman)
