TOKYO (Reuters) - All Nippon Airways Co expects to receive all 55 Dreamliner jets it has ordered from Boeing by March 2018, its president said, adding pressure on the U.S. firm to ramp up production of the much-delayed aircraft.
Japan's biggest airline by passenger numbers will become the first carrier to receive the 787 Dreamliner on September 25 and plans to have 20 Dreamliners by March 2013.
The lightweight jets will by then be helping ANA cut fuel costs by 4-5 billion yen a year and 10 billion yen by the time all 55 jets are in operation, ANA president Shinichiro Ito told Reuters in an interview.
"We were in big trouble because we had to push back our business plans (due to delays with the Dreamliner)," Ito said on Wednesday. "I'm so excited to finally be receiving it."
The twin-engined, wide-bodied Dreamliner, which promises to raise the bar for fuel efficiency and passenger comfort, is about three years behind its original schedule and estimated to be several billion dollars over budget, largely because of snags in its complex global supply chain.
Ito said the Dreamliner, along with the company's new budget carrier, AirAsia Japan, would play a key role in helping double ANA's operating profit margin to 10 percent in three to four years.
"For the 787, we see a few possible destinations in North America and another few in Europe and hope to start the services in next business year," Ito said.
SUPPLY CHAIN KINKS
In 2004, ANA initially ordered 50 B-787 Dreamliners, which Boeing promises will provide 20 percent greater fuel efficiency than similarly sized planes, giving them a longer range.
Boeing, the world's second-biggest plane maker after EADS (EAD.PA) unit Airbus, has taken more than 830 orders for the Dreamliner, whose list prices start at $185.2 million.
About 35 percent of Dreamliner's parts are being developed and manufactured in Japan with Mitsubishi Heavy Industries (7011.T) supplying the wings and Kawasaki Heavy Industries (7012.T) and Fuji Heavy Industries building (7270.T) part of the front fuselage section and centre wing boxes.
The U.S. company expects to produce 10 of the aircraft per month by the end of 2013.
Kinks in the supply chain, however, have caused several programme delays.
Asked about further delays in 787, Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, told reporters in Beijing: "We have a plan. We are meeting that plan and we are committed to that plan. Are there risks? There are always risks."
"I believe we have turned a corner in terms of production and in terms of design of the airplane," he said, adding that Boeing will deliver 485-495 airplanes this year, including 25-30 787s.
Asia remains a key market for Boeing and rival EADS fuelled by China's rapidly expanding air industry and booming growth in budget carriers in the region.
BUDGET TRAVEL MARKET
Japan has long been considered a difficult market for budget carriers because high labour costs and landing fees, coupled with limited availability of airport slots, kept new entrants out.
Better access in recent years, however, has attracted foreign carriers, forcing ANA and state-supported rival JAL to expand into the budget space to keep pace.
ANA's Ito said AirAsia Japan, which ANA set up with Malaysia's AirAsia (AIRA.KL), is targeting 150 billion yen in revenue in 2016, with more than 30 planes.
"The planned expansion of Haneda and Narita airports will boost the number of landing slots and offer more opportunities for travellers around the greater Tokyo area. That would also create a big chance" for budget carriers, Ito.
The pact with AirAsia, announced on July 21, marks ANA's second foray into budget air travel. Earlier this year, the company set up Japan's first budget carrier, Peach Aviation, with Hong Kong investor First Eastern Investment Group.
Rival Japan Airlines has set up a 3 billion yen budget carrier with Australia's Qantas Airways (QAN.AX) unit Jetstar Airways and Mitsubishi Corp (8058.T)
(Additional reporting by Fang Yan and Ken Wills in Beijing; Editing by Joseph Radford, Lincoln Feast and Matt Driskill)
By Mariko Katsumara and Kentaro Sugiyama
TOKYO | Wed Sep 7, 2011 5:48am EDT
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