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Tuesday, March 12, 2013

Rumor: JAL could be a launch customer for the upcoming Boeing 777X

According to Wall Street Journal, Boeing is close to seeking board approval for the go ahead of the 777X jets, which is an updated version of the current 777 planes. Once approved, Boeing can start selling them to customers. But for now, Boeing has made conditional offers to at least 3 customers, including Japan Airlines (JAL), Emirates (EK), and International Airlines Group (IAG, the parent company of British Airways (BA) and Iberia (IB)) to be one of the launch customers of the 777X.

777X is Boeing's answer to Airbus' 350. There are 2 variants of the 777X being developed right now. The first one to enter service would be a stretched version of the current 777-300ER. This can carry up to 400 passengers, up from the 365 of the 777-300ER. The second variant will be a direct replacement of the current 777-300ER. Boeing plans to deliver the first variant some time in 2019 and the second variant in 2021.

According to JAL spokesperson, JAL is indeed interested in purchasing the 777X but declined to comment on whether it has received a conditional offer from Boeing to be one of the launch customers. EK, which is the largest operator of the 777, has been very vocal about the need to replace its fleet with an updated version of the 777 and it is more interested in the 2nd variant of the plane. No comments from IAG though.

The good thing about being the launch customer is that you can have more inputs during the development cycles and make sure it is a plane that fits your needs. But you also have to bear the risk at the same time. We all see All Nippon Airways (ANA) has to cancel thousands of flights due to the 787 grounding. Although there should be less risk involved for the 777X given it's not a brand new revolutionary plane like the 787 is. Also, the initial batch of planes will most likely be overweight and have some teething issues to work out.

Given the current strategy of JAL seems to be focus more on using smaller sized aircraft to improve fleet flexibility, I am not sure which variant JAL is interested in purchasing. It makes sense to purchase the 2nd variant which is a direct replacing the 777-300ER JAL is using on its flagship long-haul routes to the US and Europe. But will the 400-seated variant be too big to JAL though? Will they have trouble filling up the planes? Not long ago JAL had to retire its 747 fleet (although that's partly due to fuel efficiency) and canceled the remaining order of the 777-300ERs. But if the rumor is true, we will be finding this out really soon as Boeing will likely get the board approval as early as next month :)

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