Bloomberg News

All Nippon Defers 787s, Expects Profit Drop After Japan Tsunami

July 29, 2011

July 29 (Bloomberg) -- All Nippon Airways Co., the first customer for Boeing Co. 787, deferred deliveries of four Dreamliners and forecast a 14 percent decline in full-year profit after a tsunami disrupted travel in Japan.

The carrier will receive 20 Dreamliners in the two years ended March 31, 2013, compared with the 24 previously planned, spokeswoman Megumi Tezuka said by phone today. The Tokyo-based airline made the change as it adjusts flight schedules, she said.

ANA’s net income will likely decline to 20 billion yen ($258 million) in the year ending March 31, as a power shortage following a March 11 earthquake and tsunami damps travel. The carrier also has to contend with fuel prices that have jumped 52 percent in a year and a global travel slowdown that has caused Singapore Airlines Ltd. and Air France-KLM Group to pare growth.

“The impact from the earthquake is likely to have a lasting effect this year,” said Ryota Himeno, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co. “Demand for domestic travel is dropping as people avoid flying.”

In the fiscal first quarter, ANA had a loss of 8.5 billion yen, compared with a loss of 5.3 billion yen a year earlier, it said in a statement today. Sales were little changed at 305 billion yen.

The carrier fell 1.5 percent to 261 yen at the 3 p.m. end of trading in Tokyo. The earnings were announced after the market closed.

Dreamliner Schedule

ANA will receive 12 Dreamliners before March 31, down from a planned 14, Tezuka said. It will get eight more next fiscal year, instead of 10. Boeing has said it intends to deliver the first 787 by the end of September.

ANA’s passenger numbers on domestic routes plunged 20 percent from a year earlier in April, following the tsunami, which crippled a nuclear-power plant. The tally dropped more than 10 percent in May and June, according to data on the carrier’s website.

Passenger numbers on ANA’s overseas routes rose 4 percent in the fiscal first quarter as the carrier added flights following the opening of a new terminal at Tokyo’s Haneda airport. Japan Airlines Corp. has also cut overseas services as part of a restructuring plan.

--Editors: Neil Denslow, Terje Langeland

To contact the reporter on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net


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