January 31, 2008 -- TOKYO, Jan 31 (Reuters) - Japan's All Nippon Airways (ANA) said on Thursday it would spend 630 billion yen ($5.9 billion) to buy 59 new fuel-efficient planes from Boeing to help it cope with soaring jet fuel prices.

Japan's second-largest airline also said it may in the future buy regional passenger jets from Mitsubishi Heavy Industries, which is trying to enter a market dominated by Brazil's Embraer and Canada's Bombardier Inc.

ANA has been spending more aggressively on smaller planes to save costs than Japan Airlines Corp (JAL), Asia's biggest carrier by revenue and ANA's toughest competitor in the domestic market.

"The competition for profits is fierce and it will be difficult to survive if we don't cut costs," Osamu Shinobe, ANA's executive vice-president, said at a press conference.

With the deal, close to half of the company's fleet of about 240 planes will be fuel efficient by the business year to March 2010, allowing it to save 15 billion yen that year, ANA said.

ANA's earnings results on Thursday showed that while its operating profit for the nine months ended in December rose 2.5 percent from a year earlier to 94 billion yen, its jet fuel bill jumped about 17 percent to 160 billion yen.

It also forecast that operating profit would stay roughly flat at 80 billion yen in the 2008/09 and 2009/10 business years, held back by high fuel prices and a one-year delay in the expansion of Haneda airport in Tokyo to 2010.

ANA said it will purchase 28 Boeing 737-700s and 737-800s, 26 midsize 787s and five of the larger 777-300s over four years.

ANA plans to finance the purchase with the 280 billion yen it received for selling 13 hotels to Morgan Stanley last year and through operating profit. It has no plans to issue new shares, a company spokesman said.

ANA shares ended up 4 percent at 423 yen on Thursday, outperforming a 1.9 percent rise in the Nikkei share average. (Additional reporting by Nathan Layne; Editing by Mike Miller and Sue Thomas)

Source: Reuters News