All Nippon Airways expanding Asia flights

By Desmond Hutton
Bloomberg News Service

TOKYO — All Nippon Airways Co., Asia's second-biggest carrier, said it plans to triple flights to Asian destinations in the next fiscal year from pre-Sept.-11 levels in anticipation of more demand for China services.

The carrier will raise the number of flights to Asia to 88 and increase the number of departures from Tokyo's main international airport at Narita by more than half in the business year ending March 2003, the company said in a release.

All Nippon is hoping to tap increasing demand for traffic to China after a second runway opens in April at Narita, which may help the company return to profit next business year. The airline has been hurt by consumers' reluctance to travel as Japan suffers its third recession in a decade, and worries about terrorism after last September's attacks in the United States.

"We're expecting them to return to profit next year," said Osuke Itazaki, an analyst at Credit Suisse First Boston, who has a "hold" recommendation on the carrier. "One worry for us, though, is that with the extra focus on China, their seat capacity looks like it's going to fall."

All Nippon said that its fleet capacity in available seat kilometers, a measure of seats and distances flown, will shrink 1.9 percent as the company adds more of its wide-body aircraft to shorter domestic routes.

"Domestic routes are where the demand is," said All Nippon spokesman Fred Tanaka.

Japan Airlines Co. said the number of passengers on domestic flights increased 6.1 percent in January from a year earlier.

All Nippon plans to increase the number of flights 20 percent in the next business year as it increases its fleet by a net of three airplanes, the company said.

The company will add seven Boeing 767 planes from May, including six 767-300ER jetliners, and a Bombardier DeHavilland DHC8-300 regional airplane.

All Nippon plans to retire six planes, including a Boeing 747- 100SR in September, the company said.

All Nippon plans to increase to twice-a-day flights to Beijing, Shanghai and Hong Kong. It will also restart flights to Qingdao in China, the company said.