By Daniel Hauck TOKYO, July 23 (Reuters) - All Nippon Airways Co Ltd (ANA), Japan's second biggest airline, said on Tuesday it would buy 14 Boeing Co (BA) jets for 170 billion yen ($1.46 billion) in its first new plane order since September 11. The move will boost Boeing's efforts to maintain its stranglehold on the Japanese market over its European archrival Airbus SA and is expected to help ANA, which fell into the red last year, slash annual costs by 10 billion yen. ANA, which faces increased competition on the domestic front from an impending merger of its two main rivals, said in a statement it would purchase five Boeing 777-300 plans and nine Boeing 767-300 ER planes to increase the efficiency of its fleet, particularly on its domestic operations. Delivery is due between April 2004 and March 2007. The engines on the 777-300s will be bought from Pratt & Whitney (UTX), while General Electric Co (GE) will supply the engines for the 767-300 ERs, ANA said. "Our fleet plans are a clear signal to the competition that we are going to maintain a position of leadership in the domestic market," ANA President and CEO Yoji Ohashi said in a statement. ANA, which currently controls half of the domestic market, is facing increasing competition with the formation of a holding company on October 2 by Japan's largest airline, Japan Airlines Co Ltd (JAL) (9201), and third-largest Japan Air System Co Ltd (JAS) (9203). Weak demand for overseas flights after the September attacks in the U.S. helped send ANA to its fourth group net loss in five years in the year to March, but the airline has vowed to return to profit this year despite growing domestic competition. Company spokesman Fred Tanaka said on Tuesday that the purchase reflected ANA's confidence in its ability to bounce back in a market that has seen a smaller business impact from last year's attacks than the United States or Europe. "It's a fair indication of our outlook for the market," Tanaka said. ANA will be retiring eight Boeing 747-100 planes, two Boeing 747-200s, eight Boeing 767-200s and seven Airbus 321 planes by March 2007 to make way for the new craft, which would have significantly lower maintainance and operating costs. The changes will reduce the number of different planes it uses to four from eight, excluding narrow-body aircraft types, further boosting the cost savings it expects. BOEING STILL DOMINANT With Asian airlines expected to bounce back more quickly from September 11 than their European and American counterparts, Japan is a crucial battleground for Boeing and Airbus, which is 80 percent-owned by European Aerospace firm EADS (EAD) (EAD) and 20-percent by BAE Systems Plc of Britain (BA). Airbus has said it aimed to sell 300 new aircraft in Japan over the next 20 years, which would boost its share of the market to 50 percent from around 18 percent at present. Boeing expects Japanese airlines to require about $121 billion worth of airplanes over the next 20 years and has said it was optimistic about the effect the JAL/JAS merger would have on its sales in Japan. JAL currently buys all of its planes from Boeing. Before Tuesday's announcement ANA already boasted 107 planes from Boeing and only 32 from Airbus. Boeing also expects its new high-speed Sonic Cruiser, which will fly 20 percent faster than most existing jetliners, to help maintain its dominant position in Japan. An industry executive told Reuters at the Farnborough air show in Britain that Boeing had already declared Tuesday's ANA aircraft order in its public statements of commercial business, though without revealing the customer's name. The announcement came after the end of stock market trading. Shares in ANA ended down 0.32 percent at 316 yen, while the key Nikkei average was up 0.26 percent. (additional reporting by Takeshi Yoshiike) ($1=116) ©2002 Reuters Limited.