TOKYO (Reuters) - Japan's biggest airline ANA Holdings said on Friday it will issue new shares to raise $3.2 billion, much of which will be used to fund its orders of fuel-efficient Boeing (NYSE:BA) 787 Dreamliner jets.
Like other big global airlines ANA has been making cost cuts, including pay reductions, to cope with a coronavirus-driven travel slump.
But while many other airlines have been deferring widebodied plane deliveries to safeguard their finances, ANA has opted to stick with its pre-pandemic 787 orders from Boeing.
It says the 787, which is smaller than other widebody models, will be a cost effective alternative to bigger planes that may struggle to make money even after the coronavirus crisis ends.
"On routes to Europe and the United States we flew the Boeing 777, but after the coronavirus, rather than 777 capacity, the 787 is going to be a better size," ANA Senior Vice President Kimihiro Nakahori said at a press briefing.
In February the airline, which was the launch customer for the carbon-fibre 787, ordered 20 new Dreamliners worth $5 billion at list price, bringing its total orders to 100 planes.
Some of those may be configured with fewer business-class seats, Nakahori said, because ANA expects a quicker rebound in leisure travel.
ANA does not expect its home market to recover for two years, and has forecast the downturn in international travel to last until 2024. The carrier last month forecast a record operating loss of 505 billion yen for the year to March 31.
Its first share issue since 2012 comes after ANA last month secured $3.8 billion in subordinated loans to replenish its cash reserves.
Of the 14 million shares it plans to issue, ANA said it will offer a quarter to overseas investors.
ANA picked Nomura Holdings (NYSE:NMR) and Goldman Sachs Group (NYSE:GS) as two of the global coordinators for its first share offering since 2012, sources earlier told Reuters. ANA declined to identify the coordinators.