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Tuesday, July 27, 2004 - Page updated at 12:00 AM

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All Nippon signs contract for 50 7E7 jets

Seattle Times aerospace reporter

All Nippon Airways


Headquarters: Tokyo

Founded: December 1952

President/CEO: Yoji Ohashi

Current fleet: 167 planes, including 132 Boeing jets

Employees: 14,506

Passengers: 48.1 million, world's seventh-largest

Passengers on flights inside Japan: 44.8 million

Annual revenue: $9.1 billion*

Annual profit: $248.3 million*

First Boeing order: Jan. 1, 1964, for nine 727-100s

Total Boeing orders: 324

* Numbers are for fiscal year ended March 31, 2004

Source: All Nippon Airways

Yoji Ohashi may not have Ichiro's shotgun arm or lightning-quick bat.

But if the chief executive of All Nippon Airways keeps buying Boeing planes in bunches, he may rival the popularity of the Mariners' right-fielder in the Puget Sound area.

Ohashi formalized All Nippon's status as the launch customer for Boeing's all-new 7E7 last night in Seattle by signing a contract for 50 of the jets, with deliveries to begin in mid-2008.

"You'll have to forgive me if I'm a little nervous," Ohashi told a group of reporters. "It is a very important day for us."

The deal was approved by All Nippon's board and first announced April 26.

All Nippon was Boeing's biggest customer of 2003 when it ordered 45 narrow-body 737-700s in June a year ago.

Ohashi declined to discuss the financial terms of the 7E7 deal, which would be worth $6 billion at Boeing's retail price of $120 million for a 7E7. Launch customers placing large orders normally receive substantial discounts, however, so All Nippon likely paid far less than that.

Twenty of All Nippon's planes will be 7E7-8s, the baseline aircraft configured to carry 217 passengers in three-class seating up to 8,500 nautical miles.

All Nippon's other 30 planes will be short-range 7E7-3s; those jets have seating capacity similar to the 7E7-8 but a maximum range of only about 3,500 nautical miles because they are lighter and carry less fuel.

All Nippon will tweak the jets' configuration to optimize the two models' fit with its network.

All Nippon's 7E7-8s will carry 230 passengers and have a maximum range of just under 7,000 nautical miles. They will fly primarily international routes, Ohashi said, particularly into China and other parts of Asia.

All Nippon's 7E7-3s will carry 300 passengers in two classes of seating and will have a range of 1,400 nautical miles.

Flights inside Japan accounted for more than 90 percent of All Nippon's passengers last year, and the carrier will use many of its 7E7-3s to serve that huge domestic market.

Though undoubtedly pleased with the status and recognition that comes with being the launch customer for a new airplane, Ohashi said more pragmatic forces compelled All Nippon to be the first airline to order the 7E7.

"At the moment we have 52 767s. In about 2008, they'll be more or less 20 years old" and nearing retirement age, Ohashi said.

"The 767 was and is in our estimation a very good and very efficient workhorse for us," he said, so finding a replacement that would perform as well or better was a priority.

John Leahy, the top salesman at Airbus, has complained publicly that All Nippon never asked for a competing proposal from Airbus for a 767 replacement, and he suggested All Nippon went with the 7E7 for political reasons.

Ohashi emphatically rejected Leahy's suggestion.

"There were absolutely no political issues in the background whatsoever," he said. "We wanted a brand new airplane, and Airbus said they would not have one in the time we needed."

Airbus told All Nippon that it expected to have a replacement for its comparably sized A330 by 2012.

All Nippon will receive six 7E7-8s during the first year of production, in 2008, and another six in 2009, Ohashi said.

Mike Bair, leader of the 7E7 program, said recently that Boeing has takers for virtually all of the 92 7E7s it plans to produce in 2008 and 2009. But outside of All Nippon's order, Boeing has announced just three deals for 11 7E7s , leaving room for another blockbuster deal in the coming months.

All Nippon will begin taking delivery of 7E7-3s in 2010, but Ohashi did not say at what rate.

David Bowermaster: 206-464-2724 or dbowermaster@seattletimes.com

Copyright © 2004 The Seattle Times Company

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