Recorded at CAPA Global LCC Summit, 1-2 Mar 2018

Vanilla Air Update

Vanilla Air Senior EVP Mioka Yamamuro discusses the airline’s expansion plans for 2018 and expected benefits of its membership in Value Alliance. Vanilla Air is taking an additional A320, its 15th, later this month and launching service from Fukuoka to Taipei, its fourth Japan-Taiwan route. Value Alliance has generated some bookings, particularly passengers transferring from Value Alliance international to Vanilla domestic flights at Tokyo Narita, but volumes have so far been low. Ms Yamamuro expects higher interline volume as the Value Alliance website is relaunched and members start promoting their offline destinations.


Mioka YamamuroWe will be receiving another aircraft next month, within the next few weeks actually, in March. We will be opening up new route from Fukuoka to Taipei that will be our fourth destination in Japan for Taiwanese. We may have some new routes later in the year.

Our Taiwanese route, the route to Taipei, Kansai-Taipei, Okinawa-Taipei, those routes are doing pretty well. I think it was, the competition was very intensive the year before. It got a little relaxed, and because there's so many Taiwanese coming to Japan, they're looking for new destination in Japan. So we thought maybe Fukuoka may be a good gateway to Kyushu area, so that's why we chose Fukuoka to be the fourth destination for Taiwanese.

But Taipei to Ho Chi Minh, unfortunately we will be stopping the flight by end of March. This was a bit difficult for us. We thought that by putting another route between Taipei and Fukuoka, maybe much better than what we do over to Ho Chi Minh.

We are interested in both domestic and also international. We will of course use Value Alliance to extend our destinations. But it doesn't mean that we will focus on domestic or we will focus on international. We just look at the market and where the demand is, we will try to open up a new route.

Yes, but with the A320, the aircraft we have now, and because we are based in Narita, the maximum flight time is about four and half hours. So eventually we want to extend our wings to further down, either we use Value Alliance or we fly it with a bigger aircraft, or longer aircraft.

We have our unique destination, Amami Oshima, which we fly from Narita and also from Kansai. And also we are putting a lot of flights into Chitose, Hokkaido. We will have about eight to ten flights a day during the summer schedule, which gives customers a lot of choice to choose from. So I think that's one of our strategy, not to just spread destination everywhere, but for certain routes that we will put more frequency.

18 months since we have launched the Alliance. We have almost completed everybody to be connected into the common platform. So now, we have been seeing some of the passenger booking on our domestic flights, from Cebu Pacific, from [Scoot 00:03:00], which is a good connection, because they arrive in Narita and then they can take our domestic flights from Narita. So that's an easy connection, because they will have to go through the immigration anyway if you're entering Japan.

And then because now everybody's pretty much connected into the platform, I think you will be seeing more activities this year. First we will be revising, or retaining, ValueAlliance.com. It will come with the next few months. And we'll take it from there.

It's not that much else, because we haven't done any promotions. I think what we will do is we will probably do some promotions with some of the airlines to promote our destinations, or promote their destinations. And again, unless the platform is there, unless the quality is insured, we can't do any promotions. So we're just about to start doing that now.

Everybody keeps their individual brands, but for example Jeju, they have connected to us very recently, and they're doing some promotions on one of our destinations. So those are the things that I think we need to do to make the market know, or recognize that they can book the through flight through Value Alliance members.

It's pretty much self-connection, so if you are taking international to international, unfortunately at the moment we don't have any through check in. But for those passenger who are coming to Japan, and then connecting to domestic flights, they will have to do self-connect, or they will have to do the connection anyway at Narita. So that's probably no disadvantage from [inaudible 00:04:44] carriers.

CAPA is always very exciting. They've got good speakers. I've pretty much enjoyed my panel with some of the executives. So I would like to come back again.

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