Sunday, 27 January 2013

ANA Sees Minimal Impact From Dreamliner Grounding


TOKYO—An executive from the airline most affected by last week's grounding ofBoeing Co.'s BA -0.39% 787 Dreamliner jets said the impact on its profits so far is minimal, and that it shouldn't see a significant dent in its bottom line even if the halt in flights continues through the end of February.
All Nippon Airways Co. 9202.TO -1.67% already has a contingency plan to deal with the potential prolonged delay in the resumption of the state-of-the-art jets.
But, "we think the impact isn't so big that we will need to implement" measures to undertake a fundamental review of route and fleet strategies, Shinzo Shimizu, an ANA senior vice president, said in an interview.
These are the first remarks made by an ANA executive on the company's business outlook since two separate incidents with Boeing's flagship 787 prompted the world-wide grounding of all 50 of the aircraft starting on Jan. 16.
Still, ANA's route shuffling and customer loss highlight how some of Boeing's key customers are losing money each day the 787 grounding continues.
U.S. and Japanese regulators and safety investigators have been working for more than a week to detect the root causes and to find corrective action to resume the 787 service. The U.S. Federal Aviation Administration and Japan's Civil Aviation Bureau as well as the airlines hope to bring the plane back in the air as soon as they are convinced the aircraft is safe. But regulators say they are stumped about the cause of the battery failures.
ANA took the hardest hit among global airlines, as it owns the largest number of Dreamliner jets, at 17. The Tokyo-based company uses more 787s for its domestic flights than international flights with 60 flights a day, or 8% of the company's total daily domestic flights. It flies six or eight 787 international flights a day.
A total of 398 domestic flights will be canceled by the end of the month since Jan. 16, affecting 53,400 passengers because of the halt of 787 operations.
However, Mr. Shimizu said his company won't lose as many customers as the numbers show. More than half of the passengers have rescheduled their flights to those before or after the canceled ones for the same day.
ANA also looks to minimize cancellations to 20-30, a third to half the 60 daily flights, by taking alternate jets on other services to 787-routes and bringing online planes that are supposed to go on maintenance but still can fly safely.
"There hasn't been any big impact at the moment," Mr. Shimizu said.
The executive in charge of corporate planning stopped short of how long the carrier can operate before seeing a tangible damage to its profits with its 787 service kept on the ground.
But, for example, he still expects no big impact even if the suspension drags on until the end of February.
The final decision on the need of a strategic shift in its routes and fleet will be made when corrective action is determined to put Dreamliners back in the air, the executive said.
Once such an action plan is set by regulators, it will be clear how soon the company will be able to get its fleet back online, he added.
A launch customer encounters a string of teething problems with new aircraft. But the grounding of all 17 planes was something that the company had never expected, Mr. Shimizu said.
Still the latest fuss won't change ANA's orders for a total of 66 Dreamliners by the end of March 2022 and the relationship with the U.S. aircraft maker, the executive said.
His biggest concern is about customer trust in the aircraft.
"I have a strong hope that customers understand how the plane becomes safe again and can fly" with the aircraft again when the service resumes, Mr. Shimizu said.


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