9-Sep-2010 9:39 AM

ANA LCC to launch in autumn 2011, Hong Kong businessman to take stake

All Nippon Airways' planned LCC will reportedly be established at the end of 2010, with the following details being reported about the carriers future operations (Kyodo/The Yomiuri Shimbun/Nikkei, 09-Sep-2010):

  • Launch: The new airline will reportedly commence operations in autumn 2011;
  • Ownership: ANA will be the majority shareholder with a roughly 30% stake in the new company. It has been reported that Hong Kong businessman Victor Chu's First Eastern Investment Group will take a stake in the carrier, to become the second largest shareholder in the company. The company reportedly made the investment on expectations for growing travel demand between Japan and China. A range of domestic firms, including travel agencies and trading houses, will also be invited to take stakes in the new company;
  • Capitalisation: Expected at JPY10 billion-15 billion (USD119 million-179 million);
  • Branding: Will reportedly operate under a brand other than ANA;
  • Base: The carrier will reportedly be based at Kansai International Airport. Following ANA’s decision, Kansai International Airport is expected to proceed with a plan to invest approximately JPY10 billion to construct a new terminal building exclusively for the use by the new firm’s passengers, with an aircraft parking apron and a fueling facility;
  • Management: The carrier will reportedly appoint an experienced international LCC executive to head the company;
  • Domestic destinations/fares: The carrier may charge JPY5,000 (USD60) – compared with JPY14,050 charged by Central Japan Railway for Nozomi Shinkansen services – for services between Kansai and Tokyo Narita. The carrier may also offer Kansai-Fukuoka and Kansai-Naha services for roughly JPY5,000 and JPY8,000 (USD95). Other potential destinations include Sendai, Niigata, Nagasaki and Kagoshima. The LCC is reportedly planning to attract customers away from railway and bus operators;
  • International operations: The new LCC will also offer heavily discounted international airfares on services from Kansai to other Asian destinations (including China and South Korea), although these services will reportedly be launched following the commencement of domestic operations;
  • Cost-reduction efforts:  As part of efforts to reduce the LCC's cost base, the carrier will reportedly hire foreign pilots and cabin crew (with a new wage structure), simplify the in-flight product and use small to mid-size aircraft;
  • Formal announcement: ANA will formally decide on the establishment of the new company during an Extraordinary Board Meeting to be held today (09-Sep-2010).

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