TOKYO Shares of All Nippon Airways Co Ltd and Japan Airlines Co Ltd rose sharply on Friday, outperforming the broader market, after U.S. agencies cleared Boeing Co to restart test flights of its ground 787 Dreamliner.
The two Japanese airlines operate nearly half of the 50 Dreamliners in service, with ANA owning the most with 17, representing 7 percent of its fleet.
The new lightweight, carbon-composite aircraft were grounded worldwide on January 16, after a series of battery incidents, including a fire on board a parked 787 in Boston operated by JAL and an in-flight problem on an ANA plane in Japan.
But late on Thursday, the U.S. Federal Aviation Administration said it would allow test flights, under more stringent rules, to monitor the batteries in flight. That followed an earlier, one-time flight to move a 787 from Texas to Washington state.
ANA shares advanced 4.9 percent to 193 yen to a seven-month high, and JAL jumped as much as 6 percent to 4,440 yen, its highest level since its relisting in September, while Tokyo's Nikkei benchmark was down 1.8 percent.
Hikes in JAL's annual operating profit also boosted its shares, a trader said. The company on Monday raised its operating profit forecast for the fiscal year to end-March by almost 13 percent to $2 billion, citing strong demand on European, North American and Southeast Asian routes.
Analysts have said they did not see a serious impact on both Japanese carriers unless if the grounding drags on for a long time.
"It's not significant influence on short-term earnings," said Hidehiro Tomioka, head of equity investment at Manulife Asset Management.
But he said if the Dreamliner were to be grounded for a year or so, then it would have serious implications for their earnings.
ANA said last week that it lost around $15 million in revenue as a result of the Dreamliner grounding, while JAL said the idling of the passenger jets would shave $7.6 million from its operating profit in the year to end-March.
GS Yuasa Corp, the battery maker for the Dreamliner, shed 1.5 percent to 330 yen. Its stock is down 5.4 percent since the Boston fire on January 7, sharply underperforming a 5.1 percent rise in the Nikkei.
In a sign of investors' bearishness on the stock, short-selling interest in the company was high, although it had slipped from a recent peak, according to data provider Markit.
Markit data showed 80.2 percent of GS Yuasa stock that is available to be borrowed went out on loan as of February 6, down from 86.76 percent on January 22.
(Reporting by Dominic Lau; Editing by Matt Driskill)