March 6 (Bloomberg) -- All Nippon Airways Co. may expand a venture with Deutsche Lufthansa AG after greater cooperation with partners helped the Japanese carrier double transfer passengers at its main international hub.
All Nippon may start tie-ups with Lufthansa units Swiss International Air Lines AG, Austrian Airlines AG and Brussels Airlines NV, ANA President Shinichiro Ito said in a March 2 interview. The Tokyo-based airline began the Lufthansa venture in October following the start of a similar accord with United Continental Holdings Inc. in April 2011.
“We’ve had a big boost in passengers flying to Narita airport and changing planes” because of the two pacts, Ito said in Tokyo. Widening the Lufthansa agreement “is definitely a possibility,” he said.
The carrier, the only operator of Boeing Co. 787s, may also start flights to Moscow using the aircraft, as it expands international operations, improves its frequent flier program and updates lounges to win more long-haul and business travelers, Ito said. The carrier is focusing on these markets as new budget airlines threaten to lure passengers on domestic and short-haul international routes.
“About half of Japanese flying abroad use non-Japanese airlines, so there is a lot of room for ANA to expand its international business,” Seigo Ando, a Tokyo-based senior analyst at Deutsche Bank AG, said by telephone. “Moscow is a good destination, as there are many potential passengers related to automakers and other kinds of companies going there from Japan for business.”
ANA is backing two of the new low-cost carriers in Japan -- Peach Aviation Ltd., which began flights last week, and AirAsia Japan Co., which will start services in August. The two may generate annual revenue of as much as 200 billion yen within five years, Ito said in an interview published in the Nikkei newspaper today. Jetstar Japan Co., part-owned by Japan Airlines Co. and Qantas Airways Ltd., will make its debut in July.
Under the ventures with United and Cologne, Germany-based Lufthansa, ANA coordinates schedules with its partners, as well as sharing revenue. The pacts helped boost ANA’s transfers at Narita Airport to about 100,000 in the fourth quarter of 2011, a 170 percent increase from a year earlier, according to Megumi Tezuka, a spokeswoman.
Narita as Hub
“A lot more passengers are using it as a hub to fly to China and other areas in Asia,” Ito said. “It’s not just business customers, but economy class as well.”
Lufthansa is focusing on fully implementing the bilateral agreement with ANA by April 1, its spokesman Boris Ogursky said by phone from Frankfurt. The agreement allows the possible entry of the carrier’s affiliate airlines, he said, adding that no decision has been taken on the matter yet.
ANA expects to boost sales 3.1 percent to 1.4 trillion yen ($17 billion) in the year ending March 31. Profit will probably drop 14 percent to 20 billion yen amid higher fuel prices, the company said on Jan. 31.
The carrier rose 0.4 percent to 254 yen in Tokyo trading today. It has risen 18 percent this year compared with a 14 percent gain for the Nikkei 225 Stock Average.
The airline, which received its first Dreamliner in September, is now flying five of the planes with another due to arrive this month. Boeing will deliver another 14 in the year starting April 1. The airline has ordered a total of 55 Dreamliners, 10 more than Japan Air, as it works on a 22 percent expansion of international flights in the next two years.
ANA plans to use the 787’s greater fuel efficiency to start services to cities that don’t have enough demand to support larger planes. These include Seattle, where flights are due to start by the end of March 2013, and San Jose.
“There are lots of places we want to fly the 787,” Ito said. “It all depends on the pace at which we get the planes.”
The airline has also discussed Boeing’s planned 737 MAX, a single-aisle aircraft that competes with Airbus SAS’s in-development A320neo, Ito said. The carrier suggested that the new plane be designed to hold air-cargo containers, he said.
“When we’re flying the plane domestically we can cope with it not being able to carry containers,” he said. “When we fly it overseas though, we want to be able to carry cargo.”
The airline, which operates 56 Boeing 737s, isn’t looking to buy more narrow-body planes at present, Ito said. The carrier has outstanding orders for 10 more of the current variant of the 737s, according to Boeing’s website.
Boeing is planning to start deliveries of the 737 MAX, an upgrade of its most widely flown jet, in 2017.
To contact the editor responsible for this story: Neil Denslow at email@example.com