Thursday, March 27, 2014

Airbus Tunnels Under A Boeing Fortress In Japan

Today, ANA announces a 40 aircraft deal with Boeing and a 30 aircraft Deal with Airbus. Before Boeing panics, as once again Airbus leaves on Boein's face, Boeing needs to back up a bit to JAL's deals last year as they bought 30 plus A350-9 and A350-1000. The come back and examine the sales effort by Boeing presented to ANA.

ANA bought a preponderance of dollar value Boeing aircraft for the 777-9 and 787-9 line of aircraft. A break down of model types and numbers will appear below. A total of 16.9 billion were ordered from both aircraft giants. Airbus sneaked a $3.3 billion order book out of Japan, where Boeing strongly and openely takes home $13.3 billion dollars in orders. A second ratio is the percentage of bank taken by these two suiters in the breach of Boeing's Japanese fortress. If this were a seige they (Airbus) only dented the wooden bridge over the moat and set it afire.

However, this is the second assault on the Japanese Market Place. One can see a clearer picture emerging with both Airbus and Boeing. Airbus is using these marketing battles and skirmishes as probes in a process of taking Boeing's castle in the orient. Boeing is upping the defense much to the delight of ANA. JAL may have rattled Boeing a bit, as Airbus successfully ambushed Boeing last year as, that Airbus Marketing team put down a sputtering Boeing team. What can be taken out of that loss to Airbus, is that Boeing disrespected the market and JAL got a sweet deal from Airbus.

The next round goes to Boeing with a message that Airbus has its foot in ANA's door with 30 NEO not Max's. The sub text could be the single aisle market for ANA is a sooner need for single aisle, rather than a later Max need. But Boeing should not brush that order off as an Need order for ANA. Boeing needs to flood Max orders into the Orient as soon as possible. Boeing needs to make those 30 NEO's order with Airbus as just a stop gap replacement of equipment order. That is a significant introduction into ANA's fleet. Boeing needs to counter strongly with a MAX order somewhere in ANA's market region. A head to head comparison is required by Boeing  to blunt the NEO invasion into Japan.

Boeing's order book is a wide body order in dollar value which is about an 80% of that $16.9 billion spent on these orders. Airbus walks away with only about 20% of the dollar value during this round of orders. The Gravitas for Airbus is that Airbus is there at all in the face of the Boeing's Max presence. This is a warning shot over Boeing's bow. Boeing worked extra hard with ANA as did Airbus. It was a marketing slugfest which went down to the mat. ANA was pleased with the outcome as Boeing tipped its hat towards all in the marketing ring. ANA likes these knockout rounds as Boeing no longer takes anything for granted with Japanese customers. The JAL breaches the Boeing market with its wide body Airbus order, and ANA with the single aisle order.

Boeing should keep it hand close to the vest during these next five years as other airlines mount new orders in succession, during the development years of both the 777x and the Max. Airbus will continue to give away airplanes much to the delight of its customers where the Boeing offensive will be the validation of its family of aircraft. Already the world is seeing the 787 advantages through the forest of glitches. Those glitch trees are eliminated one chop at a time. The 787 is the keystone of what Boeing is trying to accomplish for all its other models. The A350 is not the Keystone of its family of aircraft. The New Engine Option for both the the A321 and A330 is about the illusion of performance not a new design aspects as found in the MAX, The 787, and 777x. The Airbus models are rapidly becomeing a patchwork example of chasing Boeing all over the drawing board forgeting key engineering elements that Boeing has created through its own processes of design. An A350 that forgets what's in the 787. An A320 that slaps on new engines with addition enhancements. An A330 not yet announced as another NEO which strives to copy its own concept from the A320. This is a tit for tat battle fought with simple enhancements by Airbus and a more robust approach by Boeing.

I believe JAL blinked with its order of Airbus wide bodies and ANA cuffed a warning to Boeing with its single aisle order from Airbus.

Here is the sum of it all from the news bin:

All Nippon Airways Splits $16.6 Billion Aircraft Order

20 Boeing 777-9

14  Boeing 787-7
 6    Boeing 777-300 ER

Total: 40 : $13.3 billion for Boeing

Foot in the door order for Airbus

“Both aircraft makers were very aggressive in their sales pitches,” All Nippon’s president, Shinichiro Ito, told reporters in Tokyo. “That helped us secure even better conditions.”

ANA ordered 30 planes from Airbus, including:

  • 7, A320neo jets and
  • 23, of the A321neo model.

This comes to about $3.3 billion for Airbus

Besides giving Airbus additional sales in Japan, the deal also solidified its more general edge in selling the next generation of smaller single-aisle jets. Its Neo models have been outselling Boeing’s 737 MAX around the world.

The purchases from Boeing and Airbus also amount to All Nippon’s biggest order and will help bring its fleet to 250 planes.