ANA combines low-fare subsidiaries

ANA Holdings is integrating its two low-fare subsidiary airlines Peach Aviation and Vanilla Air with the aim of becoming the leading budget carrier in the Asian region.

The process of full integration is planned to start in the second half of FY2018, aiming to be completed by the end of FY2019. Peach Aviation has been designated as the basis for the integrated airline.

The airline plans to have more than 50 aircraft operating on more than 50 routes beyond FY2020, up from the 35 aircraft and 39 routes currently served.

By FY2020, the integrated low-fare airline plans to enter the mid-haul LCC market to “aggressively incorporate” the growing travel demand in Asia, and aims to contribute to the Japanese government’s goal of 40 million people visiting Japan in 2020.

Peach Aviation started operations from Osaka Kansai Airport in 2012 as the first Japanese low-fare airline, while Vanilla Air started its operations from Tokyo Narita Airport in 2013.

Following the integration, the airline will be positioned for further fleet growth and network expansions from Osaka Kansai Airport as well as from Tokyo Narita Airport.

ANA said in a statement: “The integration will combine and further enhance the strengths the two LCCs have today, and will create a stronger competitive advantage to further promote not only the Japan domestic service, but also capture the strong demand for visitors to Japan.”

With target revenue of ¥150 billion Japanese yen, and an operating profit of ¥15 billion for FY2020, ANA said the strategy will contribute to increased operational efficiency and reduction of unit costs.

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