Exclusive: Boeing nears $3.5 billion 737 MAX jet deal with Japan's ANA - sources

By Eric M. Johnson

SEATTLE (Reuters) - Boeing Co is close to a deal worth $3.5 billion at list prices to sell 30 737 MAX jetliners to Japan's biggest carrier, ANA Holdings, two people familiar with the matter said.

A deal would be the first sale in Japan for the newest version of Boeing's best-selling 737 family. Five years ago, ANA was also the first carrier from the country to pick the competing A320neo narrowbody from France's Airbus SE.

It would also come at a time when Japan is facing pressure from U.S. President Donald Trump's administration to cut its trade surplus with the United States.

An announcement on an ANA-Boeing deal could come as early as Tuesday, subject to the airline's final approval, the people told Reuters on condition of anonymity.

ANA confirmed it was considering an order of Boeing jets, but did not provide any details.

"We are in discussion with Boeing, but we have not made our final decision yet," an ANA representative said. The airline is scheduled to report its quarterly results on Tuesday.

Boeing declined to comment.

Boeing and Airbus, the world's two top planemakers, have amassed thousands of orders for their narrowbody jets on significant fuel savings offered by a new generation of engines, but they continue to battle for global market share, with the U.S. firm chipping away at its European rival's recent lead.

At end-March, 81 percent of ANA's aircraft with more than 100 seats were Boeing built, the carrier's website shows.

ANA's rival Japan Airlines Co. Ltd also operates a mostly Boeing fleet, giving the U.S. company its most dominant position in any major aviation market.

The case for Japanese carriers buying Boeing is also boosted by the fact that its aerospace firms such as Mitsubishi Heavy Industries, Kawasaki Heavy Industries and Subaru build major portions of Boeing's aircraft, including the 787 Dreamliner's carbon composite wings.

Around 80 percent of large jets operated by Japanese carriers are Boeing planes, a Boeing spokesman in Tokyo said.

TRADE TENSIONS

Japan has used major plane orders in the past to demonstrate a commitment to buying U.S. goods in the ebb and flow of trade frictions, and a new deal for Boeing's 737 MAX would coincide with similar tensions now.

Washington and Tokyo are discussing a potential trade pact, with Japan facing mounting pressure to cut its trade surplus with the United States that stood at $56 billion in 2018, versus $69 billion in 2017.

Trump and other top U.S. have asserted that Tokyo unfairly ships millions of cars to North America while blocking imports of U.S. autos and farm products. Japan says its markets for manufactured goods are open.

In September, Trump and Japanese Prime Minister Shinzo Abe agreed to start trade talks that appeared, temporarily at least, to protect Japanese automakers from further tariffs on their exports, which make up about two-thirds of Japan's trade surplus with the United States.

Japan has insisted any pact would not be a wide-ranging free trade agreement, but U.S. Trade Representative Robert Lighthizer said last year he was aiming for a full free-trade deal requiring approval by Congress.

(Reporting by Eric M. Johnson in Seattle; additional reporting by Ritsuko Ando and Tim Kelly in Tokyo; Editing by GV De Clercq, David Evans and Himani Sarkar)