Bloomberg News

All Nippon Gains After Increasing Profit Forecast: Tokyo Mover

February 01, 2012

Feb. 1 (Bloomberg) -- All Nippon Airways Co., Asia’s largest listed carrier by sales, gained the most in more than 10 months in Tokyo trading after raising its full-year operating profit outlook.

ANA climbed 6.8 percent, the most since March 16, to 237 yen at the close in Tokyo. The carrier was the biggest gainer on the Nikkei 225 Stock Average, which rose 0.1 percent.

The airline raised its operating profit forecast by 20 billion yen ($263 million) to 90 billion yen for the year ending March 31 as it accelerates cost cuts, it said yesterday after the Tokyo Stock Exchange closed. ANA, the world’s only operator of Boeing Co.’s new 787 plane, is using smaller and more fuel- efficient aircraft and cutting sales costs as three low-cost carriers are set to start flights in Japan this year.

“The announcement of the cost cuts is giving ANA a boost,” said Mitsushige Akino, who oversees the equivalent of $650 million in assets in Tokyo at Ichiyoshi Investment Management Co. “Investors are anticipating that management will be able to make good on their predictions. The question is how they will perform in a more competitive environment.”

ANA kept its full-year net income forecast of 20 billion yen, 14 percent less than its profit of 23.3 billion yen a year earlier, and left its sales forecast at 1.4 trillion yen.

The carrier, which operates domestic flights with the 787 to Okayama and Hiroshima from Tokyo, started its first international service to Frankfurt with the new plane last month and plans to add flights with the aircraft to Seattle and San Jose, California, later this year.

The airline, which has ordered 55 of the Dreamliners, predicts it will save about 10 billion yen a year in jet kerosene costs when its fleet of the more fuel-efficient planes is in service.

--Editors: Terje Langeland, Robert Fenner

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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