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Carriers in Japan resume 787 flights as 747 era ends

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By Chris Cooper and Kiyotaka Matsuda
Bloomberg News
Published:
  • Japan Airlines employees see off its Boston-bound Boeing 787 at Narita airport in Narita, near Tokyo, on Saturday. JAL resumed its regular flights of ...

    Kyodo News

    Japan Airlines employees see off its Boston-bound Boeing 787 at Narita airport in Narita, near Tokyo, on Saturday. JAL resumed its regular flights of the Dreamliner on Saturday after battery problems in 787 jets resulted in the worldwide grounding of the jets.

TOKYO -- ANA Holdings and Japan Airlines, the world's two largest operators of Boeing 787s, are counting on the Dreamliner to boost profits as the carriers dump their fleets of 747s that they relied on for decades.
ANA and JAL, both based in Tokyo, are focusing on adding direct flights to U.S. and European cities with the more fuel- efficient 787 as such services wouldn't be profitable with larger aircraft. The carriers resumed their Dreamliner services June 1 after battery malfunctions caused flight suspension for more than four months.
"Most of the world's international airlines don't want large quadjets, or only want token numbers, and Japan is no exception," said Richard Aboulafia, a vice president of Teal Group, a Fairfax, Va.-based consultant. "Smaller long- range jets permit more direct city pair flights. Airline passengers will pay a premium to avoid flying through a hub."
The Dreamliner's success is crucial for the two Japanese carriers as they have ordered 111 of the plastic-composite jets with ANA being the world's largest airline customer for the plane. Carriers such as Singapore Airlines Ltd. have retired their fleets of 747s as higher fuel costs prompt companies to seek more efficient aircraft, helping Boeing rack up about 840 orders for the Dreamliners.
JAL, once the world's biggest operator of 747s, retired its last jumbo in 2011, according to the company. ANA, which bought 45 of the planes from Boeing, will remove the last aircraft from service by the end of March, according to Megumi Tezuka, a spokeswoman at the carrier.
ANA resumed 787 services on June 1 with a flight to Frankfurt from Tokyo's Haneda airport, according to Houston- based industry data tracker FlightAware.com. JAL also resumed its Dreamliner operations with a flight to Singapore, according to FlightAware.
JAL canceled a 787 flight to Beijing Monday after tape covering two holes used to regulate airflow in the auxiliary power unit was not removed after testing, triggering an alert, the company said in a statement Monday. There was no abnormality in the battery, it added.
ANA received its 19th Dreamliner last month, while JAL received its eighth 787 last week, the airlines have said separately. China Southern Airlines Co., that nation's biggest carrier by passengers, took delivery of its first 787 on Monday.
JAL, which added a new route to Boston with the 787, also plans to add a service to Helsinki with the plane. ANA has added San Jose to its network with the Dreamliner, as well as extra flights to Frankfurt, the hub of its Star Alliance partner Deutsche Lufthansa AG.
"To increase the top line the airlines need to increase their destinations, which they can do with the 787," said Osuke Itazaki, an analyst in Tokyo at SMBC Nikko Securities. "It's a strategic plane."
ANA shares have gained 18 percent this year, compared with a 33 percent advance in the Nikkei 225 Stock Average and a 41 percent increase for JAL.
All Dreamliner planes were grounded in January after two incidents involving lithium-ion battery systems.
One of ANA's 787s made an emergency landing on Jan. 16 after smoke from a lithium-ion battery was detected, while a battery caught fire on a JAL 787 in Boston nine days earlier. No one was injured in either incident.
The Dreamliner groundings will probably cut ANA sales by about $159 million, according to figures from the company. JAL's probably lost close to $65 million in sales due to the groundings, the carrier has said.
Boeing redesigned the battery to include more protection around individual cells to contain any overheating, added a steel case to prevent fire and a tube that would vent any fumes outside the fuselage. Carriers began 787 test flights after the battery upgrades were approved by the U.S. Federal Aviation Administration.
The 787 is safe to fly, even as the cause of the battery meltdowns remains uncertain, Mike Sinnett, vice president and chief project engineer of the 787 program, said in April.
Ethiopian Airlines Enterprise was the first to restart flights in April after fixes, followed by Qatar Airways, Air India and United Continental Holdings.
Story tags » 747787

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