Japan's ANA to place orders for 10 Boeing planes

TOKYO, Dec 21 (Reuters) - All Nippon Airways (9202.T), Japan's second largest air carrier, said on Monday that it would buy a total 10 planes from Boeing (BA.N) for about 185 billion yen ($2.1 billion).

ANA said it will place an order for five Boeing 777-200ER jets, to be delivered between April 2012 and March 2014, and another five 767-300 ER models, to be delivered between April 2010 and March 2012.

UPDATE 1-Japan's ANA to place orders for 10 Boeing jets

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TOKYO, Dec 21 (Reuters) - Japan's All Nippon Airways (9202.T) formally decided on Monday to order 10 planes from Boeing (BA.N) for about $2.1 billion to tap new passenger demand as Tokyo's Haneda airport expands.

Japan's second-largest carrier said that it will place a 185 billion yen order for five Boeing 777-200ER jets, to be delivered between April 2012 and March 2014, and another five 767-300 ER models, to be delivered between April 2010 and March 2012.

ANA said in July that it would raise $1.5 billion yen to revamp its fleet with new Boeing jets, including an additional order for Boeing's 787 Dreamliner. [ID:nT105398]

ANA hopes to grab growth while bigger rival Japan Airlines (9205.T) downsizes.

It said that Monday's order, which was included in its July fundraising plan, would not affect its annual outlook for a tumble to a 20 billion yen operating loss for the year to March. ($1=90.36 Yen)

The 787-3 is likely not going to enter service before 2015, so this would allow NH to replace their oldest 767 and 777 frames currently performing domestic and regional operations. Also, I expect the 28 787-3s they have on order are not enough to replace the fleet currently tasked to those duties, so NH will likely be flying them far longer than 2-5 years.

Well NH is going almost ridiculously low density with their new "Inspiration of Japan" 77W cabin, so if they put that in the 77E, it would be around half of what their current 744 fleet is equipped for.

NH appears to have 10 744Ds still in their fleet, so it's possible these ten planes will be configured as a domestic replacement, assuming NH no longer needs 500 seats on these routes?

While not directly addressing your comments, I wonder how their "Inspiration of Japan" 77W cabin is going to pan out in terms of yields and revenues.

I believe that it is a sign that NH, having performed due diligence modeling of their traffic patterns, have decided that rather then chasing raw numbers with a 500-seat A380 or 400-seat 747-8, depending on volume to make a profit, they have identified enough core customers who will fly NH regardless of other options and are price-insenstive. Therefore, NH will provide them an exceptional onboard experience in both hard and soft product and those customers will pay for it.

So they will fly a good deal less people a day between NRT and CDG, FRA or LHR with their 77W than AF, LH or BA will with an A388, but NH will still make a profit on every one of them. And with only 200 seats, they will not be susceptible to traffic fluctuations.

But you only need 200 people a flight willing to pay those fares, kimshep. Heck, when you just count Economy Class passengers (who are the ones who would be most price-sensitive), that's only 100 people a flight. Out of a population as large as Japan's, surely that is not an impossible task for NH to achieve?

The folks who want lower fares will choose the A380 - though how this can be when A380 supporters keep noting the fare premiums people are paying to fly on her...

I like the A380. It's a great plane to fly in. But I believe NH can survive without operating one. I believe they can make this work.

I can agree with sentences 1-3 in this quote. I'm not so sure about the last sentence ?

Why are we discussing the Japanese domestic market?