Airbus wins in Japan but did the airline go for the wrong aircraft?

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By TESTCustomwebLP TESTCustomwebLP October 7, 2013 08:52

Airbus wins in Japan but did the airline go for the wrong aircraft?

Japan Airlines (JAL) has signed a purchase agreement for 31 A350s (18 A350-900s and 13 A350-1000s), plus options for a further 25 aircraft. This is JAL’s first ever order for Airbus aircraft and the first ever direct Airbus incursion into the Japanese big two, the JAS order being pre-JAL merger. JAL and Airbus aim for a delivery window starting from 2019.

This is a great order but we have to ask: Has JAL gone for the wrong aircraft with the A350-1000? I have been a supporter of the A350-1000 make no mistake there but you cannot argue with the fact that on this type Boeing has been able to wait for Airbus to make its move and then surpass the same with its 777X offering. It is therefore a worry for all operators, other than lessors, to be purchasing the A350-1000 at this time. Now I mention lessors as the A350-1000 will be the only option open to them as Boeing is aiming to control fully which customers get the 777X – a move that will delight financiers.

In another move Boeing is in the case of the 777X not getting involved in the order price fluctuations that other aircraft orders are subject to every time. The price is fixed and that is that. So it is all the more interesting that Boeing has lined up a show-stopping order stream for the 777X at Dubai this year where 777Xs will be ordered en-mass by the big three carriers in 100+ aircraft orders that we only usually see for narrow bodies.

2013 will be the year of the ten – but it will be the “X” not the ten that everyone is talking about by the year end.

It is therefore essential that airlines looking to order the 777X – such as the US and European carriers – get rolling fast as at this time it looks certain that the Middle East big three will have a significant edge with their mass block of some three hundred aircraft on the delivery cycle. So, with the 777X looking to be far lighter than the A350-1000, you have to wonder, has JAL dropped a clanger? The answer to that question lies in the purchase price achieved by JAL or the fact that they could not get the delivery schedule they wanted.

So to you all I say – Buy Boeing stock now, Airbus will take the edge off of Boeing stock at the open today after the JAL order and that will give you significant value come the Dubai air show when Boeing will fly on the back of the 777X and then everyone will be asking the questions we pose to you today.

Meanwhile look out for the Indian Rupee – it is going through the floor today and the impact will be severe for airlines there.

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By TESTCustomwebLP TESTCustomwebLP October 7, 2013 08:52
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