Japan's Dreamliner operators estimate grounding costs at $110 million

Tue Apr 30, 2013 5:29am EDT
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TOKYO (Reuters) - ANA Holdings (9202.T: Quote) and Japan Airlines Co Ltd (9201.T: Quote), which together operate nearly half the world's fleet of Boeing Co (BA.N: Quote) Dreamliners, estimate the jet's three-month grounding will shave a combined $110 million of operating profit, an expense they may ask the American aircraft maker to shoulder.

ANA, which owns 17 Dreamliners, estimates the revenue loss from mid-January up to the end of May from being unable to sell flights on its new jets at 12.5 billion yen ($127.36 million), with the subsequent operating profit loss at around half that level or around 6.5 billion yen.

The 787 squeeze on its earnings may have been enough to push the Dreamliner launch customer into a 3.6 billion yen loss in the three months ended March 31, Kiyoshi Tonomoto, a vice president at the airline, said at a briefing in Tokyo.

JAL, with seven Dreamliners, said the loss of 787 flights to the end of May plus the cancellation of charters this business year may add up to a dip in operating profit of 4 billion yen.

Both carriers reported their annual results on Tuesday with ANA saying operating profit in the year that ended March 31 rose 7 percent to 103.8 billion yen, while JAL posted a 4.7 percent dip in operating profit to 195 billion yen.

The latest estimates from the two Japanese carriers provide the best indication yet of how big a compensation bill Boeing may face once all 50 Dreamliners are back in the air. ANA will seek a cash payment from Boeing, a source familiar with the airline's intentions told Reuters in March.

ANA on Sunday took its first Dreamliner back into the air more than three months after batteries on two of them overheated in mid-January, one on an ANA plane in Japan and another on a JAL jet parked at Boston's Logan airport. A day earlier Ethiopian Airlines ETHA.UL became the world's first carrier to resume flying Dreamliner passenger jets after regulators gave the go-ahead for flights to restart.

ANA and JAL say they will begin compensation talks with Boeing once commercial flights are restarted.

With hundreds of test flights planned in May to test new reinforced battery systems installed on their Dreamliners, revenue generating operations are unlikely to begin until June at the earliest.   Continued...

Employees of All Nippon Airways (ANA) queue in front of the company's Boeing 787 Dreamliner plane after its test flight at Haneda airport in Tokyo April 28, 2013. Picture taken April 28, 2013. REUTERS/Yuya Shino