ANA splits aircraft order bill

Published Mar 28, 2014

Share

Toulouse and Tokyo - ANA Holdings has split a ¥1.7 trillion (R178 billion) order for new aircraft between Boeing and Airbus in the biggest purchase in the history of Japan’s largest airline.

ANA had agreed to buy 40 aircraft from Boeing and 30 planes from Airbus, the parent of All Nippon Airways said yesterday. The jets would be delivered between financial year 2016 and 2027. The purchases, approved by the board, would help increase the carrier’s fleet to 250 planes.

The orders will disappoint Boeing after it lost a $9.5bn (R102bn) deal from Japan Airlines (JAL) to Airbus last year that enabled the European firm to gain a foothold in Japan, where the US plane maker has had a near-monopoly since World War II.

The order from ANA will help Airbus move towards a goal of doubling its market share in Japan by 2020.

“It’s probably important to Boeing that what was a fortress market for them has now been breached,” said Timothy Ross, a Singapore-based transportation analyst at Credit Suisse. “No airframe manufacturer should have 100 percent of any country.”

ANA has ordered seven A320neo models and 23 A321neo planes from Airbus. From Boeing, it has agreed to buy 20 777-9X, 14 787-9 and six 777-300ER jets. The purchases would be ANA’s first from Airbus since purchasing A320 single-aisle aircraft in the 1990s.

The airline needed a replacement for its A320s that it uses domestically and has been considering a replacement for aging widebody 777-300s used on international routes.

“The aircraft we have selected will enable us to modernise and expand our fleet further,” ANA president Shinichiro Ito said. “These new aircraft will give us maximum flexibility and improved fuel efficiency and will allow us to meet the growth in demand, both internationally and in our domestic Japanese market.”

JAL, the nation’s second-largest carrier, announced its first-ever order for Airbus planes in a $9.5bn deal last year. The carrier ordered 18 twin-aisle A350-900 aircraft and 13 larger A350-1000s, plus options for 25 more jets.

Airbus chief executive Fabrice Bregier has said the France-based manufacturer’s planes would make up 25 percent of Japanese airline fleets by 2020. Boeing has dominated the Japanese aviation market for half a century, making it a last bastion in an industry otherwise marked by a balanced duopoly between the European and US plane makers.

“What this shows is that Airbus is making headway in Japan,” said Shukor Yusof, an analyst at the Singapore-based equity arm of Standard & Poor’s. “The next step would be to win wide-body orders from ANA.”

Both ANA and JAL were early customers of Boeing’s 787 Dreamliner, which was delayed by more than three years and grounded globally for three months last year after batteries smouldered on two of the Japanese airlines’ jets. ANA has ordered 66 Dreamliners but none of the largest 787-10 variant introduced last year, according to Boeing’s.

The 777X, unveiled in November last year amid a $100bn order blitz, is the first twin-engine plane with range and payload comparable to a four-engine jumbo. Boeing says the larger version, the 777-9X, will be 12 percent more efficient than the A350-1000.

For decades, Chicago-based Boeing claimed a fortress-like grip on the Japanese market as plane sales matched the increasing role that local manufacturers played in its aircraft supply chain.

Japanese companies designed and supplied 35 percent of the structure of the 787, with Mitsubishi Heavy Industries making the wings, and Kawasaki Heavy Industries and Fuji Heavy Industries assembling a front fuselage section and centre wing boxes.

Airbus planes use about $1bn of parts and materials annually from manufacturing partners in Japan and the company is seeking to expand its supplier base in the country.

After unions guaranteed labour peace through 2024, Boeing has increased work in the US with its latest 777, which is set to reach the market by the end of the decade. – Bloomberg

Related Topics: