Money Matters - Simplified

$9 billion order deal between Airbus and JAL

Airbus has entered into a ground-breaking deal with Japan Airlines Co. So, it has managed to enter into a terrain that had been captured by Boeing Co. for a very long time.

After placing an order with the Airbus, this turns out to be a maiden venture for the company. The win of Airbus is an epitome of the long-term repercussions on Boeing’s relationship with its great customers such as JAL. Boeing witnessed a loss after a huge procrastination of three and half years to its flagship 787 Dreamliner program.

Earlier during the grounding of jet this year, it was witnessed that JAL had questioned the long-term exclusivity between the two companies.

Presently the deal involves 31 long-haul A350 jetliners with a catalog price of 950 billion yen ($9.75 billion). The two companies have said that the deal also gives an option to have 25 more jetliners.

Fleshing out the details, the companies have said that the deal would be effective from 2019. In the next six years, a new range of planes would be launched, said the authorities concerned.

According to the JAL President Yoshiharu Ueki, the problems of Dreamliner did not influence its decision to join hands with Airbus.

He said that the A350 properly fitted in the selection criteria for a safe, high-quality aircraft with the financial support of the manufacturer. And he added that the company also rolled out a time table that went well with its replacement cycle.