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ANA seeing recovery in travel demand and profitability, may need budget unit: CEO

6-Apr-2010 11:48 AM

All Nippon Airways President and CEO, Shinichiro Ito, stated the following about the carrier's plans and prospects for 2010 (Reuters, 03-Apr-2010):

  • International services: The carrier plans to increase capacity amid a travel upturn in Asia by capitalising on its Star Alliance partnerships, recent government aviation agreements and new slots at Tokyo Haneda Airport. The carrier is currently studying how it would utilise international slots at Tokyo Haneda to increase frequency to Asia and the US West Coast. The carrier aims to boost international revenues by 68% to JPY357 billion in the 12 months ending Mar-2011 from FY2010 levels;
  • Demand/profitability levels: Demand for international services has increased in Mar-2010 and Apr-2010, driven by increased demand to/from China, signalling that the "worst is over", according to Mr Ito. The carrier added that it has seen improved profitability levels, particularly in Business Class segments, with the carrier expecting more than 40% year-on-year growth in passenger bookings for May-2010;
  • LCC subsidiary: As part of its growth strategy in Asia, the carrier stated it may need a budget airline subsidiary, although this is dependent on having a low cost airport to support the services. Mr Ito added that if ANA is unable to find a suitable low cost base in its home market, it may have to look elsewhere, for example, Hong Kong. He commented, "we would first need to see whether the LCC model would really work in Japan. To operate an LCC, we'll also need find airports that are open 24-hours-a-day with low landing fees"; 
  • Strategic importance of 2010: Mr Ito described 2010 as "strategically important for us" - the carrier aims to return to profit, the B787 delivery is scheduled (the carrier is the launch customer for the aircraft type) and the expansion for Haneda airport is planned.

ANA: "Passenger bookings are showing double-digit growth for international operations for April and also May. A stabilised economy is seen creating more business travel demand. Some (passenger) inflow from JAL is also seen," Shinichiro Ito, President and CEO. Source: Reuters, 03-Apr-2010.

ANA: "The worst is over..It is vital how we can transform the growth in customer numbers to growth in income per customer...Of course, we have to think about how to raise revenue from our own routes. But we will also have to think about our partners as we share the revenue. This is a new stage,"  Shinichiro Ito, President and CEO. Source: Dow Jones, 03-Apr-2010.