Airbus battle for Japan skies seen a long haul TOKYO (Reuters) =97 Nobody said it would be easy. Airbus, the European=20 aircraft maker, is pulling out all the stops to sell its new A380=20 super-jumbo in Japan. But a mix of politics, history, and harsh market=20 reality will make it tough to break the stranglehold its archrival Boeing=20 holds on the Japanese market with a share of 80%. It's a high stakes=20 battle. Japan is the biggest commercial air market outside the United=20 States and its airlines have bought around $60 billion of Boeing planes in= =20 the past three decades. With its high population density, crowded airports= =20 and some of the busiest domestic air routes in the world, Airbus's=20 555-seater looks a perfect match for Japanese airlines. "If there were no=20 politics involved and the A380 couldn't sell in a high density market like= =20 Japan then something would be wrong," said Doug McVitie, managing director= =20 at the Scotland-based consultancy Arran Aerospace. "But the politics=20 override all other commercial considerations," said McVitie, who was=20 previously a salesman for Airbus in China and has also been a consultant=20 for Boeing. Boeing's strong standing in Japan is supported by Tokyo's=20 political and defence ties with the United States and a tight web of=20 commercial relations with Japanese heavy machinery makers who produce up to= =20 20% of the airframes of its aircraft. Airbus's new strategy is right out of= =20 Boeing's textbook. The company set up a Japanese subsidiary in 2001 and has= =20 dished out over $3 billion worth of contracts to 15 Japanese suppliers for= =20 A380 production. It aims to win over industry and use that leverage to=20 convince local airlines to buy its planes. AIRBUS TARGETS JAPAN Japanese airlines' apparent lack of interest in the A380 =97 due to enter=20 service in early 2006 =97 contrasts with a series of orders from rivals like= =20 Qantas Airways and Singapore Airlines Korean Air said on Wednesday it may=20 buy up to eight of the superjumbos. In Japan, Airbus faces some of the=20 world's most loyal Boeing customers. JAL, Japan's largest airline which=20 recently merged with Japan Air System (JAS) to form Japan Airlines System,= =20 has never ordered an Airbus. Airbus was dealt a blow in April when Japan's= =20 second-biggest airline, All Nippon Airways (ANA) said it would buy 45=20 single-aisle B737 planes from Boeing and phase out Airbus models. But=20 Airbus, owned by European aerospace firms EADS and BAE Systems, says it now= =20 has a winning formula. The double-decker A380 will hold 35% more seats than= =20 Boeing's flagship 747 and Airbus is considering a special version for=20 Japan's domestic market that could hold up to 840 people. "Japan has some of the densest domestic routes in the world, and we feel=20 they would be perfectly suited to the A380," said Takahiro Nosaka,=20 spokesman for Airbus. Japanese carriers also have an eye on overseas=20 rivals. "It seems there's a strong chance Lufthansa, Air France and=20 Singapore Airlines will fly the A380 into Narita," said Yoshie Otaka, a=20 spokeswoman for Japan Airlines, referring to the international airport near= =20 Tokyo. "In that case we have to think about the competitiveness of our=20 fleet." Japan Airlines has the biggest fleet of 747s in the world. "We've=20 still got an open book with regard to the A380," said Takeshi Nakai,=20 director of corporate planning at Japan's ANA. Airbus expects Japanese=20 airlines to place orders for the jet by 2006, its top salesman Jim Leahy=20 said this week at the Paris Air Show. It has firm orders for 116 A380s, and= =20 expects to top Boeing in total aircraft deliveries this year for the first= =20 time. BOEING BETS ON 7E7 Airbus's campaign comes at a time when Japanese airlines =97 battered by the= =20 effects of a war in Iraq and the SARS virus in Asia =97 are looking to slash= =20 maintenance and training costs by reducing the number of aircraft types in= =20 their fleets. "If anything the trend seems to be moving to Boeing," said=20 Osuke Itazaki, analyst at Credit Suisse First Boston (CSFB) in Tokyo.=20 "Airlines are also trying to increase flexibility with the use of smaller=20 aircraft and more frequent flights." Boeing =97 which has no replacement=20 planned for its three-decade old 747 =97 is placing its bets on the smaller= =20 7E7, touted as an ultra-efficient replacement for its 767 wide-body which=20 would seat 200-250 and be its first new jet in a decade. The company is=20 already moving to lock in Japanese industry. Boeing has chosen Mitsubishi=20 Heavy Industries and two other Japanese manufacturers to be among five=20 candidates to design and build the 7E7 airframe. "The Japanese market is=20 far more critical to Boeing than it is to Airbus, because Airbus doesn't=20 have it," said McVitie. "Airbus can only win it and Boeing can only lose= it." *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Mas Site: www.tntisland.com/tntrecords/mas2003/ Site of the Week: http://www.carib-link.net/naparima/naps.html TnT Webdirectory: http://search.co.tt *********************************************************