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Tue, Jul 01, 2003 - Page 12 News List

All Nippon looks to simplify fleet by buying 45 Boeings

AIRPLANE WARS The deal means that the US plane-maker will keep its big lead over Airbus in the nation by controlling 80 percent of the market

BLOOMBERG

All Nippon Airways Co, Asia's second-biggest airline, said it placed a firm order for 45 Boeing Co 737-700 jetliners on Saturday, in a move to cut costs by reducing its fleet of single-aisle planes to one aircraft type.

Deliveries of the new planes, worth as much as US$2.48 billion according to list prices, will start in December 2005, the company said in a press release.

All Nippon, which didn't confirm the value of the order, expects to save about ?6 billion (US$50 million) a year from the shift to one narrow-body aircraft type from the current two.

The airline now operates a fleet of 53 single-aisle planes, including 26 Airbus SAS A320s, 25 Boeing 737-500s and two 737-400s, All Nippon said. Operating more than one aircraft type increases maintenance and training costs.

The new, 142-seat planes will be powered by CFM56-7 engines made by CFM International, a joint venture of General Electric Co and France's Snecma SA.

All Nippon first announced it had selected Boeing to supply its single-aisle planes on April 9.

The decision sparked protests from the governments of France, Germany and Spain as well as the European Commission, which said the selection was unfair and the reasons for choosing Boeing "weren't entirely commercial."

The win for Boeing means Japanese carriers remain dependent on the US company for at least 80 percent of their aircraft.

Boeing and its European rival Airbus are desperate for orders to keep their factories operating as a global slump in air travel saps demand.

In related news, Airbus SAS, Europe's largest planemaker, is bidding for a contract worth about 700 million euros (US$801 million) with Air Algeria, French daily La Tribune reported, citing an Airbus executive.

The Algerian airline wants to buy five A330 and three A320 planes. Airbus submitted its offer last month, said Abdellah Sbai, vice president of Middle Eastern sales at Airbus, the paper reported.

Airbus, which is 80 percent owned by European Aeronautic Defense & Space Co and 20 percent by BAE Systems Plc, has won five times as many aircraft orders as rival Boeing Co this year.

"Air Algeria published an tender offer to which we've responded on May 7," Sbai told La Tribune.

Separately, a report in Le Figaro said yesterday that Air France resumed flights to Algeria over the weekend for the first time since a hijacking attempt in 1994.

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