March 27, 2014 / 9:39 AM / 5 years ago

Japan's ANA gives Boeing a boost with 777X order

(Reuters) - ANA Holdings Inc (9202.T) restored Boeing Co’s (BA.N) momentum in a Japanese market it has long dominated by ordering 20 new generation 777X wide-body jets after a stinging defection by Japan Airlines Co (9201.T) last year to rival Airbus Group NV (AIR.PA).

All Nippon Airways' (ANA) planes are seen at Haneda airport in Tokyo February 14, 2014. REUTERS/Yuya Shino

Japan’s largest carrier announced an order for 70 jets worth 1.7 trillion yen ($16.62 billion) at list prices and its biggest order ever, to replace aging planes while expanding its overseas fleet by 30 aircraft. Nearly half the list value was for the 20 777-9X wide-body jets.

The order was closely watched as the dynamics in Japan’s aircraft market, strongly influenced by U.S.-Japan relations, shifted after a bailout of Japan Airlines under a previous government now in opposition.

Japan Airlines last October announced an order of 31 wide-body A350 aircraft worth $9.5 billion at list prices, with the first aircraft due for delivery in 2019. It also has options for another 25 of the A350 jets.

Japan Airlines President Yoshiharu Ueki said delivery schedules played a big part in the landmark order for Airbus. ANA will not take delivery of its first 777X jets until 2021.

“Of course we looked at performance and quality, but we also looked at the economics and when the aircraft would be available,” ANA Holdings President Shinichiro Ito told a news conference.

Also hanging over the latest jumbo order decisions were difficulties with Boeing’s 787 Dreamliner, which has been dogged by battery problems.

ANA, the launch buyer and world’s biggest owner of the 787, suffered millions of dollars of losses as a result of battery problems with the airliner, which was grounded by regulators for several months last year.

But ANA’s latest order included 14 more 787 jets, as well as six 777-300ER aircraft, the predecessor of the 777X. ANA also ordered 30 single-aisle Airbus A320 and A321neo aircraft. It has previously ordered the smaller Airbus jets.

Japan Airlines’ decision to choose Airbus wide-body jets had raised expectations that ANA might also break with its exclusive use of Boeing jets for medium and long-haul flights.

But Boeing recaptured some momentum when the 777X was launched with record orders at the Dubai Airshow in November. The 777-9X, the larger of the jet’s two variants, will carry 406 passengers, more than the Airbus A350-1000, and enter service in 2020. ANA said it expects deliveries in the 2021 to 2027 April-March financial years.

Boeing has traditionally held more than 80 percent of Japan’s commercial aviation market due largely to strong links with Japanese suppliers and political ties between Tokyo and Washington.

($1 = 102.31 Japanese yen)

Additional reporting by Siva Govindasamy in SINGAPORE; Editing by Edmund Klamann, Jeremy Laurence and Matt Driskill

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