Boeing Is Said to Be Nearing 737 Max Deal With Japan Airlines

(Bloomberg) — Boeing Co. is close to sealing an order from Japan Airlines Co. for at least 20 of its 737 Max planes, according to people familiar with the talks, beating out arch-rival Airbus SE and its competing A320neo aircraft family. 

After holding discussions with both manufacturers, JAL is leaning toward Boeing, the people said, asking not to be identified as the deliberations are private. The order will likely be a combination of smaller Max 8 jets along with some of Boeing’s larger Max 10 planes, one of the people said. 

Talks are ongoing and a final decision is still to be made, the people said. JAL may sign the deal by the end of March, they said, and make a formal announcement when it updates markets at the end of its fiscal year. 

A 737 Max 8 costs about $51.3 million, according to calculations by aircraft appraiser Avitas Inc., which doesn’t have a figure for the 10 version as that isn’t yet in service. 

Boeing and Airbus declined to comment. A spokesman for JAL also declined to comment. 

Bloomberg News previously reported that JAL was looking to replace its older, short-haul fleet, which includes 43 Boeing 737s, FlightRadar24 data show. The Tokyo-based carrier’s short-haul network covers Japan and destinations in Asia. Its subsidiary Japan Transocean Air Co. also operates 737 aircraft. 

Airlines globally are overhauling their fleets and modernizing with more fuel-efficient jets as travel surges back from the pandemic. The International Civil Aviation Organization expects passenger demand to return to pre-Covid levels on most routes this quarter and then to 3% above 2019 levels by year-end. 

JAL, a member of the oneworld alliance, operated about 22,000 domestic passenger flights in January and almost 3,000 international, according to data released by the company last month. Its domestic traffic bounced back to 24.6 million passengers in 2022, while international numbers rose to 3.4 million from 892,471 in all of 2021 and just 290,816 in 2020.

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Airbus’s A321neo was previously considered to be the frontrunner for a more substantial JAL order to replace the 737s, before it swung to Arlington, Virginia-based Boeing, some of the people said. 

Airbus has told customers they will face longer waits for its latest jet — the long-range A321XLR — as the manufacturer contends with production snarls and regulatory checks on the model’s new fuel-tank design. Some jets in the wider A321 family are arriving nine months late, Air Lease Corp. executives said in February. Boeing is also experiencing delays. 

Boeing delivered 35 Max aircraft globally in January and 38 commercial aircraft in total, nearly double Airbus’s monthly tally. Its total order backlog stood at 4,585 jets, including 3,609 Max sales. 

–With assistance from Charlotte Ryan.

©2023 Bloomberg L.P.


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