Japan’s All Nippon Airways (ANA) has today revealed plans to launch a new low-cost, medium-haul carrier, which will see it going head to head with Japan Airlines for the leisure market. Using 787s to target non-business travelers in Southeast Asia and Oceania is something ZIPAIR is trying to do right now. ANA hopes to launch its new airline by 2022.
ANA planning a new low-cost entity
You wait all year for a new low-cost Japanese carrier, and then two come along at once. Today, Japan’s All Nippon Airways revealed plans to launch a new low-cost airline in response to the changing marketplace stimulated by COVID. The as-yet-unnamed third airline will slot in neatly between ANA’s full-service airline and its short-haul low-cost airline Peach, catering to a new mid-range class of leisure travelers.
The new airline, which ANA hopes to launch by 2022, will target low-cost, medium-distance flights to destinations around Southeast Asia and Oceania. It will use ANA’s charter airline, Air Japan, as its foundation, and will use Boeing 787s configured with 300 or more seats to service its markets.
ANA says that the reason for this move is threefold. Firstly, the demand for business travel is predicted to decrease, and will likely never return to previous levels due to more homeworking and the popularity of online meetings and conferences. Secondly, demand for leisure and visiting friends and relatives (VFR) traffic is predicted to remain robust. Finally, it says there is new potential for untapped markets focusing on simple service, exemplary hygiene and lower cost travel.
In a statement, Shinya Katanozaka, President and Chief Executive Officer of ANA, said of this move,
“ANA HD is embarking on an ambitious transformation that will strengthen operations and position it for long term growth and success in a market still reeling from COVID-19. As we work to fully account for the current situation, we will introduce a new business structure based on two major strategies.
"This comprehensive transformation initiative is not simply about cutting costs, instead it will address how travel has changed so that ANA HD has a framework for an entirely new, future-oriented operational strategy.”
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Going head to head with ZIPAIR?
The strategy of using Dreamliners to target medium-haul leisure traffic is something Japan Airlines figured out some time ago. It’s low-cost entity ZIPAIR finally took to the skies with passengers onboard just last week, and it is already planning an expansion into new markets.
The target markets for ANA’s planned entity appear to be closely aligned with those of ZIPAIR. Currently, ZIPAIR flies to Seoul from Tokyo’s Narita airport and will start one-way flights to Bangkok from tomorrow too. Its recent ETOPS certification means routes to Hawaii are firmly on the cards once border restrictions allow.
ANA is yet to reveal target destinations for the new brand, but Southeast Asia will likely be a quick win, with high demand for travel to near-ish international destinations a priority. Some 52,000 Japanese diaspora currently live in Bangkok, with a further 36,000 in Singapore and 25,000 in Hong Kong. Catering to the VFR needs of these price-sensitive travelers makes sense for the ANA group.
The announcement is part of a suite of transformative measures designed to position ANA for an effective post-COVID recovery. Its adaptation to the ‘new normal’ also includes extensive digitization of the business, transformation of the business models of both the main ANA brand and Peach Aviation, and a temporary downsizing of operations.