ANA looking to cut ¥100 billion in costs, expand international services

Bloomberg

All Nippon Airways Co. plans to slash costs by ¥100 billion and expand international flights as it gears up for rising competition at home.

The carrier, the world’s only operator so far of Boeing Co.’s 787 Dreamliner, plans to boost international capacity by 22 percent in the two years starting April 1, the carrier said Friday.

The cost savings are planned by the end of March 31, 2015, it said.

ANA, which has 55 of the Boeing 787s on order, plans to use the new planes to expand overseas service, including flights to Seattle and San Jose, California, from Tokyo.

Rival Japan Airlines Co. also said this week it is buying more of the fuel-efficient planes to expand international operations as three new budget carriers that start flying this year add to domestic competition.

ANA said it expects to have 20 of the Dreamliners by the end of March 2013 and a total of 27 a year later.

The carrier, the biggest airline customer for the jet, has said the 787 fleet will save it ¥10 billion in fuel costs.

The carrier began flying the plane domestically in November and added flights to Frankfurt last month. ANA uses a two-class configuration of 264 seats on local routes with the plane, while long-haul flights will have 158 seats.

The initial order of 50 planes in 2004 was worth about $6 billion at list prices.

JAL has ordered 35 of the aircraft.

ANA said it is also considering plans to change to a holding company in April 2013. Two of the three new discount carriers starting flights this year are backed by the airline.

AirAsia Japan Co., a venture between ANA and AirAsia Bhd., intends to start flying from Narita International Airport this year. Peach Aviation Ltd., backed by ANA and Hong Kong-based Far Eastern Investment Group, will start flights from Kansai International Airport next month.

Jetstar Japan Co., a venture between JAL and Qantas Airways Ltd.’s Jetstar unit, will begin flights from Narita later this year.