ANA may add Singapore, Vietnam cargo flights on growing intra-Asia trade

All Nippon Airways Co. may add cargo flights to Singapore and Vietnam from its hub on the Pacific island of Okinawa as rising wages stoke intra Asia trade.

“We need to expand our cargo network,” President Shinichiro Ito said in a Jan. 14 interview in Hong Kong. He didn’t say when flights to the two new destinations may begin.

Asia’s largest listed carrier expects the first profit at its cargo unit in the year starting April, Ito reiterated, as the Okinawa hub helps it win business connecting China, Japan and Southeast Asia. Economic growth also caused Asia-Pacific cargo shipments to increase more quickly than in Europe or North America last year, according to the International Air Transport Association.

“The freight business is doing very well,” said Ryota Himeno, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “The company made a good decision to target Asian cargo shipments.”The airline, which more than doubled cargo traffic in the year ended March, 2010, has eight Boeing Co. 767 freighters based in Okinawa. It has no immediate plans to buy any more cargo planes, Ito said.

The carrier was unchanged at 305 yen at the 3 p.m. close of trading in Tokyo.

787 Delivery

ANA, the maiden customer for Boeing Co.’s 787, is having a “hard time” coping with the late delivery of the first Dreamliner, Ito said, as the Tokyo-based airline has been forced to extend the life of some planes and add other aircraft.

The Dreamliner is running almost three years late because of delays partly related to the use of lightweight composite plastics. The carrier was due to receive the first plane around next month. This schedule has now been jeopardized after the planemaker grounded its test fleet for more than a month because of a fire onboard an aircraft.

“Boeing will do everything to make the delivery happen this year,” Ito said.

ANA opened the hub on Okinawa, 960 miles (1,546 kilometers) southwest of Tokyo, in October, 2009 as the island is within four hours’ flying times of Hong Kong, Bangkok, Taipei, Seoul and Shanghai. These cities form its network at present. The island also doesn’t have the nighttime flight restrictions that hinder operations in Tokyo.

“Our cargo volume is getting higher and higher,” Ito said. “We’re sure we can make a profit from airfreight next fiscal year.”

Asia-Pacific air-cargo traffic jumped 26 percent through November last year, according to IATA, compared with a 23 pecent increase in North America and a 12 percent rise in Europe. – Bloomberg

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