Airbus and Japan Airlines agree landmark $9.5bn deal

Airbus chief executive Fabrice Bregier says he convinced JAL "it was a no-brainer to select the A350" because "we have the best product"

Aircraft manufacturing giant Airbus has announced its first deal with Japanese carrier Japan Airlines (JAL).

It has won an order from JAL for 31 of its A350 planes, in a deal worth nearly $9.5bn (£5.9bn) at list prices.

The A350 is designed to be more fuel-efficient and is a direct competitor to US rival Boeing's 787 Dreamliner, which has been hit by safety and technical issues in recent months.

The deal is a blow for Boeing, which has dominated Japan's aviation market.

"This is Airbus' largest order for the A350 so far this year and is the largest ever order we have received from a Japanese airline," said Fabrice Bregier, chief executive of Airbus.

"I must say that achieving this breakthrough order and entering a traditional competitor market was one of my personal goals."

According to the deal, JAL also has an option to purchase an additional 25 planes.

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This is a big win for Airbus. This was the final frontier for them and they have conquered it.”

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Key to growth

In recent years, the aviation industry has been hurt by a slowdown in demand and high volatility in global fuel prices.

That has seen many leading carriers turn to more fuel-efficient aircraft in an attempt to cut down costs and maintain profitability.

Both Airbus and Boeing have seen a surge in demand for such planes.

Airbus, which says the A350 will use about 25% less fuel than previous generation wide-bodied aircraft, has had 725 orders for the plane prior to securing the JAL deal.

The company hopes to start delivering the first A350s to customers by the end of 2014.

Yoshiharu Ueki, president of Japan Airlines, said the new planes would offer "high level of operational efficiency and product competitiveness" and help the airline to cater to "new business opportunities after slots at airports in Tokyo are increased".

Meanwhile, Boeing's 787 Dreamliner continues to remain popular despite this year's temporary worldwide grounding of the aircraft while safety regulators investigated the cause of fires. The firm has received orders for more than 950 Dreamliner jets so far.

Japanese carriers, JAL and All Nippon Airways (ANA), are two of the biggest operators of the Dreamliner jets.

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