JAL places US$2.5 billion order for Boeing 737 MAX jets, undercutting Airbus

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23rd March 2023 – (Tokyo) Japan Airlines (JAL) has placed its first-ever order for Boeing’s 737 MAX jets, announcing on Thursday that it will purchase 21 of the planes to update its narrowbody fleet. The order, worth at least $2.5 billion at list prices, is a win for Boeing over European competitor Airbus, which had been in talks with JAL to sell its bestselling A320neo narrowbody jet. This is a significant development for the 737 MAX program, as JAL is a high-profile customer that will help Boeing to compete with Airbus in the narrowbody market.

Reuters reported on Wednesday that JAL had chosen the MAX, citing industry sources. The order secures a foothold for the MAX with Japan’s flagship carrier, as Boeing works to counter Airbus’s lead in the narrowbody market. JAL has traditionally operated Boeing planes, but in 2013 it surprised the industry by buying Airbus’s A350 widebody aircraft instead of the Boeing 787 Dreamliner, which was struggling with technical problems at the time. Despite the initial Airbus order, JAL’s current fleet of 48 Dreamliners is much larger than the 11 A350s it owns.

The decision to purchase the 737 MAX is an important one for JAL, which has been cautious about the plane since its grounding in 2019 following two fatal crashes. Boeing has since made significant safety improvements to the plane and has been working to regain the trust of airlines and passengers alike. The JAL order is a major boost for the MAX, which has seen fewer high-profile customers than expected since its reintroduction.

According to Richard Aboulafia, an aerospace analyst with AeroDynamic Advisories, the lack of high-profile customers has been a problem for the MAX program. “This certainly helps a lot,” he said of the JAL order. The MAX has faced stiff competition from Airbus’s A320neo, particularly in Japan where ANA’s low-cost Peach unit operates A320s and JAL’s Jetstar Japan flies leased A320s. “It’s a battle, keeping Japan,” said Aboulafia. “Boeing seems to have scored a victory here.”

The JAL order is also significant because it comes after the 737 MAX crisis, which led All Nippon Airways (ANA) to delay finalizing an order for 20 MAXs first announced in January 2019. ANA and Boeing eventually concluded the MAX deal in July. The crisis had raised concerns about whether Boeing would continue to dominate the Japanese market.

JAL’s current narrowbody fleet is dominated by the Boeing 737-800, with the carrier owning 47 of the jets and leasing another 17, according to the airline. The new 737 MAX jets will replace some of these older planes and help to modernize JAL’s fleet. The carrier has not yet announced where it will deploy the new planes or when they will be delivered.

The JAL order for 21 737 MAX jets is a significant win for Boeing over Airbus in the narrowbody market. The order is worth at least $2.5 billion and secures a high-profile customer for the MAX program. JAL’s decision to buy the 737 MAX is a significant one, given its history with Airbus and its large fleet of Boeing planes. The order is also a sign of confidence in Boeing’s efforts to make the MAX a safer and more reliable plane.