Japan's ANA to raise $1.9 billion, orders more Dreamliners

By Nobuhiro Kubo and Taro Fuse

TOKYO (Reuters) - All Nippon Airways Co (9202.T) said it plans to issue shares to raise up to $1.9 billion to shore up its battered finances and buy five more of Boeing Co's (BA.N) long-delayed Dreamliners.

Like other global airlines, ANA has suffered from the sharp downturn in air travel caused by the economic crisis, but Japan's No. 2 airline is also looking to increase investment to tap an expected rise in passenger demand once the expansion of Tokyo's Haneda airport is completed next year.

Analysts said the fund raising, ANA's first in three years, was bigger than expected, but some said the move was positive as it suggested ANA was committed to growth. In comparison, bigger rival Japan Airlines (9205.T) has been forced to downsize its business and seek an emergency loan from the government.

"From a mid- to long-term perspective, the fundraising is a positive step because ANA needed money and it has been calling Haneda's expansion a big business opportunity...This will really differentiate ANA's and JAL's financial health," said Mitsubishi UFJ Securities analyst Ryota Himeno.

Haneda, which handles mainly domestic flights, is scheduled to open a fourth runway next year. The expansion is expected to increase annual capacity by 40 percent by 2012 and allow airlines to launch new routes.

DREAMLINER BOOST

Aiming to tap the expected rise in passenger demand from the Haneda expansion, ANA has been hiring new staff and is buying new planes to replace existing ones or launch services for new routes.

The extra five Dreamliner orders, worth about $800 million at list prices, represent a vote of confidence in Boeing's troubled project.