Company Watch - Japan Airlines

AirGuide Business, Feb 25, 2008

Feb 25, 2008

Japan Airlines is looking at buying some Airbus A350 XWB planes after production delays for Boeing's 787, two company sources said. Boeing faces increasing customer ire after announcing last month a second delay for the 787, pushing first deliveries out until early 2009 and the industry has been watching to see if any airlines will switch to Airbus. The sources said JAL, which had planned to buy 55 787 planes, favoring their greater fuel-efficiency, was looking at purchasing Airbus planes as it wants to offset the cost of higher fuel prices quickly by using more mid-sized airliners. Feb 22, 2008

Japan Airlines planned on buying 35 Boeing 787s, but production delays have prompted it to consider purchasing Airbus A350 XWB jetliners, according to media reports. A spokeswoman for the airline said it is studying its fleet plans but has not made any decisions. Feb 22, 2008

Japan Airlines, one of Boeing's most loyal customers, had previously decided to buy only 787s, hoping to cut costs on parts replacement, maintenance and pilot training. That has changed, and JAL did not say how many planes it might purchase from Airbus. Boeing was not able to say if the latest delay, which it attributed to issues with suppliers, would be the final one. Feb 22, 2008

JALcard ranks sixth in Japan's credit card industry and is estimated by Japanese media to have a market value of about JPY100 billion (USD$925 million). It also boasts a high percentage of wealthy customers compared with its rivals. The Yomiuri newspaper reported in January that Mitsubishi UFJ Financial Group, Japan's biggest bank, would likely win the race for a 49 percent stake in the unit put on the block. Japan Airlines no longer feels in a rush to part with its stake and would like to take a more cautious look at the likely benefits or risks of an alliance with the buyer of the stake, the source said. Feb 21, 2008

Japan Airlines has put off a sale of a large stake in its credit card unit due to its recent earnings recovery and its securing of a capital boost, a source familiar with the matter said. Japan's largest airline by revenues had been looking to sell a stake in unlisted JALcard to help it restructure, renew its ageing fleet, and pay back debt. But JAL has postponed the sale until after its next business year starting in April, having secured buyers for up to JPY150 billion yen in fresh capital through the issue of preferred shares and a recent improvement in its earnings, the source said. Feb 21, 2008

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