(Updates with share price in fourth paragraph.)
Feb. 17 (Bloomberg) -- All Nippon Airways Co., Asia’s largest listed carrier by sales, plans to slash costs by 100 billion yen ($1.3 billion) and expand international flights as it gears up for rising competition at home.
The carrier, the world’s only operator of Boeing Co.’s 787 plane, plans to boost international capacity by 22 percent in the two years starting April 1, the company said in a statement in Tokyo today. 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 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 adds to domestic competition.
All Nippon rose 2 percent to 251 yen as of the 3 p.m. close of trade in Tokyo today.
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 yen in fuel costs.
The carrier began flying the plane domestically in November and added flights to Frankfurt last month. It 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. Japan Airlines has ordered 35 of the aircraft.
All Nippon 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 this year. Peach Aviation Ltd., backed by ANA and Hong Kong-based Far Eastern Investment Group, will start flights from Kansai 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 using three planes.
For Related New and Information: Stories on All Nippon Air and plane orders: 9202 JP <Equity> TCNI ORDER <GO> Stories on Japan-related air travel: TNI JAPAN AIR <GO> Stories on airline earnings TNI AIR ERN BN <GO>
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