Japan Airlines and Boeing reach agreement for 21 737 MAX planes By Reuters

(Reuters) – Japan Airlines placed its first order for the Boeing (NYSE:) 737 MAX, announcing on Thursday a plan to buy 21 aircraft to replenish its narrow-body fleet.

The deal is worth at least $2.5 billion at list prices, Reuters previously reported, and marks a win for Boeing over European rival Airbus, which was in talks with JAL over the best-selling A320neo narrowbody. .

Reuters reported details of the deal on Wednesday, citing industry sources.

JAL’s order secures a foothold for the MAX with Japan’s flagship airline, as Boeing strives to undermine Airbus’ leadership in the narrow-body market.

“One problem that has hampered the (737 MAX) program is that despite good orders, there haven’t been as many high-profile users. This certainly helps a lot,” said Richard Aboulafia, aerospace analyst at AeroDynamic Advisories.

Although JAL predominantly operates Boeing jets, it dealt a blow to the airline industry in 2013 when it opted to buy Airbus’ A350 widebody rather than the Boeing 787 Dreamliner, which at the time was struggling to correct technical problems.

While JAL’s current fleet of 48 Dreamliners now dwarfs the airline’s 11 A350s, the initial Airbus order raised questions about whether Boeing would continue to dominate the Japanese market.

Those concerns were intensified by the 737 MAX crisis, which led All Nippon Airways (ANA) to delay the completion of an order for 20 MAXs first announced in January 2019. ANA and Boeing concluded the MAX deal in July.

The Boeing 737-800 currently makes up the majority of JAL’s narrow-body fleet, and the airline owns 47 aircraft and leases another 17,737, according to JAL.

However, Airbus has gained ground in Japan’s narrowbody market, with ANA’s low-cost unit Peach operating A320s and JAL’s Jetstar Japan flying leased A320s.

“It’s a battle to keep Japan,” Aboulafia said. Boeing “seems to have scored a victory here.”