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Business

ANA to buy Airbus A380 jumbo jets, boost Hawaii service

An Airbus A380 jumbo jet

TOKYO -- ANA Holdings will order three Airbus A380s as it seeks to expand international service amid a peaking market for domestic flights.

     The deal, worth around 150 billion yen ($1.23 billion) based on the market price, would make ANA the first Japanese airline to add the superjumbos to its fleet. The planes are to be introduced in fiscal 2018 in routes to Hawaii and elsewhere.

     The double-decker A380 is the world's largest passenger jet, capable of seating over 500 people. The plane's carrying capacity reportedly lowers the transportation cost per seat by 15% compared with other jetliners.

     The A380 first found a home with Singapore Airlines in 2007 and later was adopted by Germany's Lufthansa and Emirates, based in the United Arab Emirates.

     ANA leads domestically in passenger count on international flights, having outpaced Japan Airlines in 2014. But ANA provides only about 20% of the seats for all Tokyo-Hawaii flights, trailing JAL's roughly 35% share.

     About 1.5 million people fly from Japan to Hawaii in a given year, filling 80-90% of seats per flight on average among all carriers. The A380 can seat more than double the passengers of ANA's existing aircraft bound for Hawaii, which would help the airline increase its share of travelers.

     Domestic rival Skymark Airlines ordered six A380s in 2011, but Airbus canceled the deal in 2014, citing delays in receiving advance payments and other issues. It proved to be a factor in Skymark filing for bankruptcy protection in January 2015 and ANA sponsoring the subsequent rehabilitation. ANA indicated to Airbus the possibility of future orders in return for supporting the Japanese carrier's turnaround plan during an August vote among creditors.

(Nikkei)

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