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Sunday, March 30, 2014

ANA Goes Shopping: Analysis of the Order

All Nippon Airways (ANA) has selected Boeing's 777-9X (20 aircraft) over the Airbus A350-1000 to replace its 777-300ERs. This was regarded as a key contract for Boeing to win, following Japan Airlines' decision last year to order Airbus A350s for its own 777 replacement needs. Boeing likely offered ANA an extremely competitive price discount on the 777X in order to ensure that the order didn’t go to Airbus like at JAL.

ANA said the 777Xs will replace its 19 777-300ERs used on international routes, and will be delivered in fiscal 2021-27. ANA operates 54 777s, which comprise -200s, -200ERs and -300s. The airline plans to purchase 6 additional -300ERs to support international growth until the 777X deliveries begin. The -300ERs are due to arrive in fiscal 2018-19. ANA is also ordering 14 more 787-9s, which will bring its total 787 order to 80 aircraft, of which 44 will be -9s. The carrier has taken delivery of 27 of its 36 orders for the 787-8.

The 777X order as “truly interesting”, especially seeing as rival JAL opted for the A350-1000 instead. ANA simply has more need for the larger seating capacity of the 777X than JAL for several reason; . ANA is the larger carrier with a larger overall network and moreover, ANA recently won the lion’s share of international slots at Tokyo’s airport, which better facilitates the use of the larger 777X.

Furthermore, ANA has had more of a challenge controlling its costs relative to JAL, which means that competitively, it needs the CASM boost of the 777X’s larger seating capacity.

An economic comparative analysis of the A350-1000 versus the Boeing 777X for a typical mission of 5,550 nm; despite the A350-1000′s optimized airframe, the seat-capacity advantage of the 777X in ANA’s typical 3 class configuration gives the 777X a 4.4% CASM advantage over the A350-1000. If, as in ANA’s case, you can fill the extra 45 seats, the 777X will be the better tool.


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Live to love and love to live. The motto that I held on my entire life. Just a regular guy who loves what I am passionate in life. A song writer and producer. Living life on the move. From Malaysia to The States, New Zealand to Singapore. With the companion of great people in life. In and out from the music industry. Taking everything one step at a time. 
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