Japan Carriers Resume Dreamliner Flights as 747 Era Ends

ANA Holdings Inc. and Japan Airlines Co., the world’s two largest operators of Boeing Co. 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, Virginia-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 four-engined 747s as higher fuel costs prompt companies to seek more efficient aircraft, helping Boeing rack up about 840 orders for the Dreamliners.

Retired 747s

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 with 146 passengers, the company said. JAL also resumed its Dreamliner operations with a flight to Singapore the same day with 184 passengers, according to the carrier.

JAL canceled a 787 flight to Beijing yesterday 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 yesterday. There was no abnormality in the battery, it added.

Operating as Normal

The airline checked its other 787s and confirmed there was no tape covering other battery box holes, said Kazunori Kidosaki, a spokesman at the carrier. The Dreamliner fleet is operating as normal, he said.

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 yesterday and will start commercial flights on June 6, according to the Guangzhou-based company. Thomson Airways Ltd., a unit of TUI Travel Plc, got its first of eight 787s on May 31 and will operate its first long-haul flight next month.

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.

‘Strategic Plane’

“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 Inc. “It’s a strategic plane.”

ANA shares fell 3.8 percent to 205 yen and JAL declined 0.6 percent to 5,190 yen at the close of trading in Tokyo today. The Nikkei 225 Stock Average dropped 3.7 percent.

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 16 billion yen ($159 million), according to figures from the company. JAL’s probably lost 6.5 billion yen 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 Ltd., Air India Ltd. and United Continental Holdings Inc.

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