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ANA splits 70-airplane order with Boeing, Airbus to modernize fleet

Bloomberg

ANA Holdings Inc., the nation’s largest airline, split a ¥1.7 trillion order for new aircraft between Boeing Co. and Airbus Group NV in the biggest purchase in the carrier’s history.

ANA agreed to buy 40 aircraft from Boeing and 30 planes from Airbus, the Tokyo-based airline said in a statement Thursday. The jets will be delivered between fiscal years 2016 and 2027, according to the statement. The order was approved by the carrier’s directors at a meeting Thursday.

The airline is buying seven A320neo models and 23 A321neo planes from Airbus. From Boeing, ANA agreed to buy 20 777-9X aircraft, 14 787-9 planes and six 777-300ER models, according to the statement.

“The aircraft we have selected will enable us to modernize and further expand our fleet,” ANA President Shinichiro Ito said in the statement. “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 market.”

The order from ANA will help Airbus move toward a goal of doubling its market share in Japan by 2020. After decades of watching Boeing dominate the Japanese aviation market, the Toulouse, France-based plane-maker had a major breakthrough last year with Japan Airlines Co.’s agreement to buy 31 long-range A350s to replace aging Boeing 777s.

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

Buying the Neos is ANA’s first from Airbus since purchasing A320 single-aisle aircraft in the 1990s. The Tokyo-based airline needed a replacement for its single-aisle A320s that it uses domestically and has been considering a replacement for aging wide-body 777-300s used on international routes.

ANA had 198 Boeing jets, or 84 percent of its fleet of 236 planes, as of Monday, compared with just 16 Airbus A320s.

JAL, the nation’s second-largest carrier, last year announced its first-ever order for Airbus planes in a $9.5 billion deal. 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 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 U.S. plane-makers.

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

The base version of the A350, the A350-900 had its maiden flight last June and has been test flying since. The first plane is set to enter commercial service this year with Qatar Airways Ltd. The A350-1000, the largest model, is slated for service in late 2017. Airbus claims the A350-1000 will have 25 percent better operating economics than Boeing’s 777-300ER.

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

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

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

Boeing is increasing work in the United States with its latest 777, which is set to reach the market by the end of the decade.

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