ANA to buy 14 new Boeing jets


ANA chief executive Yoji Ohashi, left, has agreed to help Air Do with its restructuring

By Geoff Hiscock
CNN Asia Business Editor

TOKYO, Japan (CNN) -- All Nippon Airways (ANA) has confirmed it is buying 14 new passenger jets from Boeing in an order worth around $1.5 billion.

ANA is Japan's biggest domestic carrier, with about 46 million passengers a year. It lags Japan Airlines (JAL) in international passengers.

A spokesman for ANA confirmed the order to CNN and said the airline had signed on Tuesday at a ceremony with Boeing at the Farnborough Air Show near London.

The 14 aircraft are nine B767-300ERs and five long-range B777-300s. ANA said it is paying 170 billion yen ($1.46 billion).

ANA already has 53 B767s and 21 B777s in its fleet. The new aircraft will replace some of the older model B767-200s and some Airbus aircraft.

ANA said the new aircraft will be delivered between April 2004 and March 2007.

It said it also planned to retire its entire fleet of eight B747-100s, two B747-200s (LR), eight B767-200s and seven A321s by March 2007 to make way for newer aircraft.

ANA chief executive Yoji Ohashi said earlier this year the airline would build its fleet strategy around the B777.

Increased competition


ANA is upgrading its fleet as it faces increased competition from the JAL-JAS combination

ANA is upgrading its domestic fleet ahead of increased competition after Japan Airlines buys third-ranked Japan Air System (JAS). The two are due to begin merging in October.(Full Story)

While ANA has the biggest share of the Japanese market now, that will change once JAL completes the JAS merger.

In another move to counter the JAL-JAS combination, ANA said earlier this month that it would help the beleaguered carrier Air Do make a successful turnaround (full story).

Air Do, the operating name for discount airline Hokkaido International Airlines, filed for court protection on June 24, with debts of about 6 billion yen ($50 million). That made it Japan's first airline failure under deregulation (full story).

It had been running six flights a day between Tokyo and Sapporo, the biggest city on the northern island of Hokkaido.

ANA also told CNN that increased traffic to China would help its total passenger numbers recover in 2002-03.

Domestic passengers fell 6 percent and international passengers fell 5 percent in June, compared to a year earlier.

China flights

ANA pointed to recent rapid growth on its flights from Japan to Beijing, Shanghai and Hong Kong as an encouraging sign.

In May, ANA reported a consolidated net loss for the year to March 31 of 9.4 billion yen ($81 million) on revenue of 1,204.5 billion yen ($10.38 billion).

But it said it expected to return to a small profit of 2 billion yet ($17 million) in the 2002 fiscal year.

Boeing's Chairman and CEO Phil Condit warned at Farnborough that the aviation industry is gong through its worst-ever decline.

But Dutch airline KLM agreed to buy six widebody A330-200 jets from Boeing rival Airbus for $700 million.

Stock in ANA closed down 0.32 percent at 316 yen, on a day the Topix index rose 0.14 percent in Tokyo.