A Company Restructuring Follows Boeing’s Heartbreak
For decades, ever since Japan began rebuilding after the Second World War with help from the United States, Boeing (NYSE:BA) has dominated the country’s aeronautics industry. In 1964 — the same year that Tokyo hosted the Olympic Games — the aircraft manufacturer sold its first commercial aircraft to Japan Airlines (JALFQ.PK), known as JAL, and to do this day, the 129-seat plane remains a symbol of Japan’s postwar rebirth.
In 1966, the carrier placed an order for the Boeing 747, with its distinctive hump and four big engines, which has been a symbol of jet travel for most of the past 40 years. The sale, the second placed by an airline, strengthened the relationship between the two companies. Eventually, Japan Airlines took delivery of more than 100 747s, making it Boeing’s signature plane, complete with the carrier’s red crane logo. However, this week, JAL ended its half-century relationship with Boeing, announcing it would purchase 18 A350-900s and 13 A350-1000s, an $9.5-billion order that will replace the carrier’s fleet of 777s.
“We have had a long-standing relationship — it’s a heartbreak,” Kostya Zolotusky, managing director of capital markets and leasing at Boeing Capital, the aircraft maker’s finance unit, told the Wall Street Journal. Before this setback, Boeing already lags behind its European competitor, Airbus, whose 1,112 orders are nearly 90 more than Boeing has in its backlog. Even more telling is that fact that Airbus’s 350 took its maiden flight only in June of this year, while Boeing’s equivalent aircraft, the Dreamliner, took to the sky for the first time in 2009, and only 979 orders have been made.