Japan Airlines orders 10 new Boeing

Japan Airlines (JAL) on Wednesday said it had ordered 10 new Boeing Dreamliner aircraft as it looks to build on its recovery from bankruptcy and fight off the threat from an emerging budget sector. The announcement, part of a five-year plan, is in addition to an existing order for 35 Boeing 787 planes and is part of a capital expenditure programme worth 478 billion yen ($6.1 billion). The total order includes JAL's exercising of an earlier option for 10 other Dreamliners. JAL said it expects to introduce the new planes from fiscal 2015 on medium to long haul international routes. "The overall purchase of the Dreamliner now stands at 25 firm orders of the 787-8, and 20 of the 787-9 with 20 options, raising the total order of 35 Dreamliners to 45," the airline said. The Dreamliner made its first commercial flight in October -- with JAL's rival All Nippon Airways (ANA) -- after a string of technical mishaps and years of delays that cost US-based Boeing billions of dollars in lost or cancelled orders. JAL, which is emerging from years of restructuring after filing for bankruptcy in 2010 in one of Japan's biggest ever corporate failures, said it "intends to maximise the competitiveness of the super-efficient Dreamliner". The airline said it "acknowledges challenges posed by Japan's low economic growth rate, heightened competition from low cost carriers and the downside risks resulting from the European sovereign debt crisis". JAL unveiled the plan after appointing new president Yoshiharu Ueki and new chairman Masaru Onishi last month. "We will be able to further strengthen our international and domestic flight services," Ueki told reporters Wednesday, according to Dow Jones Newswires. Japan's aviation market has long been dominated by JAL and ANA, but 2012 will see the launch of a number of new low cost carriers that are expected to provide competition to these established marques. JAL has joined forces with Australia's Qantas and Mitsubishi Corp. to launch Jetstar Japan, with five routes slated to begin in July. ANA last year set up budget airline Peach Aviation with a Hong Kong investment fund. Flights are scheduled to start in March. AirAsia Japan, a tie-up between ANA and Malaysia's AirAsia, will begin flying in August. JAL said it aims to save 50 billion yen in cost savings during the five-year period to March 2017. The carrier also said in the business plan that it will launch non-stop flights between Tokyo's Narita airport and San Diego in December 2012 and to Helsinki in March 2013. During its restructuring, the company cut unprofitable routes, reviewed its fleet, and reduced fuel expenses. It also started using a new revenue management system to improve productivity. Earlier this month, JAL reported nine-month profit of 146 billion yen ($1.86 billion at the current exchange rate), saying the strong yen helped boost its bottom line as more Japanese people went on holiday abroad. For the year to March 2012, JAL now expects a net profit of 160 billion yen and operating profit of 180 billion yen on sales of 1.19 trillion yen. JAL last March exited bankruptcy, more than a year after a spectacular collapse that prompted a government bail-out of the once-venerable flag carrier. It had gone bust in January 2010 with debts of about 2.32 trillion yen ($28 billion) but it continued flying during its rehabilitation process, which included massive job and route cuts.