9 February 2005

Fukushima Appointed President of Airbus Japan

By Mariko Sanchanta in Tokyo
Financial Times (London)

Airbus yesterday appointed a new head for its Japanese unit and vowed to break Boeing's monopoly in the world's second-largest civil aviation market, aiming for a 50 per cent market share by 2010.

The European group said it would nearly double the size of its Japan office to about 30 employees in an effort to strengthen commercial ties with the country's two leading carriers, Japan Airlines and All Nippon Airways.

Airbus's share of the Japanese market stands at 1-2 per cent and will be eroded to zero in coming years, as JAL and ANA phase out older Airbus models.

It established a unit in Japan in May 2001, but has failed to sell a single aircraft there since. Airbus won 57 per cent share of the world market last year.

John Leahy, chief commercial officer, said: "It is time to reinforce our sales activities in Japan and strengthen our marketing and commercial teams. Our competitor will do whatever it takes to maintain its monopoly position, which allows for monopolistic pricing."

Airbus yesterday named Glen S. Fukushima, a Japanese American who formerly headed NCR Japan, as its president and chief executive officer in Japan. Mr
Fukushima has worked in Japan for more than 20 years and worked for five years in the office of the US Trade Representative. He replaces Patrick Carroll, who resigned more than a year ago.

Mr Fukushima said Airbus would step up its efforts to build "long-term relationships" and "long-term trust" with the Japanese carriers. He said he was devising more specific strategies for the Japanese market.

Mr Leahy emphasised that there was "high potential" to expand sales in Japan, particularly with the new A380 superjumbo.

Airbus has struggled to gain a foothold in the Japanese market, where Boeing has had a presence for more than 50 years. It suffered a blow last week when JAL decided to order 30 Boeing 737 small passenger jets. Both JAL and ANA are launch customers for the Boeing 787 Dreamliner. Mitsubishi, Fuji and Kawasaki Heavy Industries - Boeing's top three industrial partners - are contracted to complete 35 per cent of the development and production of the 787 airframe.

Mr Fukushima's appointment comes as the US and European Union seek to resolve a trade dispute over airline subsidies to Boeing and Airbus. Japan has refused to take part in the talks.