All Nippon Airways (ANA) president Shinichiro Ito said the carrier is targeting annual sales of between JPY150 billion and JPY200 billion (USD1.8 billion and USD2.5 billion) in five years from its LCC subsidiaries launching in 2012, acccording the The Nikkei reports. AirAsia Japan "will add five or six planes to its fleet each year, bringing the total to 25-30 aircraft in fiscal 2016," Mr Ito noted, adding that while the LCCs will "take away some of ANA's customers, they will contribute to group earnings". Peach Aviation, meanwhile, launched operations on 01-Mar-2012. [more - CAPA Blog]
ANA expects LCC subsidiaries to achieve annual sales of USD1.8bn to USD2.5b in five years
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Air Do, product of Japan’s quixotic airline market, likely to remain independent pending reform
Air Do, based in the Hokkaido region in Japan, is an unusual type of carrier and perhaps one that could only exist in Japan’s atypical domestic environment. It enjoys a strikingly synergistic relationship with All Nippon Airways and leverages a valuable position at slot-constrained Haneda.
Air Do has challenges: Its traffic is highly seasonal, relying on passengers to flee the scorching summer for Hokkaido’s cooler weather. Air Do’s fleet of 767s allows it to target Tokyo-Sapporo, the world’s largest air route, while 737 classics serve thinner points in Hokkaido. But this brings considerable inefficiency to a 13-aircraft fleet, Air Do CEO Sadao Saito told CAPA’s LCCs and New Age Airlines conference in Seoul. Air Do's CASK and yield are lower than at ANA, and Air Do creates efficiency with load factors typically 10ppts higher than at ANA or JAL on overlapping routes. Air Do generally posts profits but with large variance.
All Nippon Airways to have more international than domestic capacity - but revenue still in Japan
All Nippon Airways is planning an historical shift in its business as it prepares for its international network to surpass the size of its domestic network for the first time in its history. This is a remarkable event for an airline that just over 25 years ago was and exclusively domestic operator - while still being the world's largest airline by seat numbers.
Decreases in domestic flights coupled with growth in international, and especially long haul, services from Tokyo Haneda and later Narita airports, will help ANA in 2015 have more international than domestic ASKs, one part of its business plan through 2016 that also includes plans to respond to high-speed rail and LCC competition.
However, the domestic market will still be ANA’s heartland, with the world’s third-largest domestic market producing a higher proportion of revenue (but also costs) than international. ANA does enter territory familiar to Japan Airlines, which has had a larger international than domestic focus. But now JAL is decreasing its international exposure, which will allow ANA and JAL start to converge in balancing international and domestic networks. They will also approach Air China’s international-domestic balance. With ANA having an overall larger position than JAL, it brings more risk to Japan’s declining domestic performance and increased competition on long-haul, and specifically North American, services.