ANA Gears Up to Launch New Budget Airline in Japan

ANA Gears Up to Launch New Budget Airline in Japan

Japanese carrier All Nippon Airways (ANA) plans to launch a new low-cost airline in Japan with the help of a major private equity firm based in Hong Kong.

ANA and First Eastern Investment Group have announced the new venture. The flights would begin late next year. The new carrier, which will be capitalized with $179 million initially, will be based at Kansai International Airport.

The LCC will operate both international and domestic short-haul routes out of Osaka Kansai International Airport and will operate independently from ANA. According to a report filed by ft.com, airlines in Japan pay a Y26,000 or $310 surcharge on every kilolitre of fuel they buy, about 25 times more than they do in the US, while landing charges at Kansai are 12 times as high as those at London’s Heathrow and double those at New York’s JFK, according to industry data.

The high fees pushes the cost of a round-trip flight from Tokyo to Osaka – about an hour apart by air – to Y40,000 before early-booking discounts. Mr Chu said the new airline, which will pay lower wages than ANA, would aim to charge half what incumbent carriers do on the same routes.

As per the information available, the carrier stated it plans to “stimulate new demand through pricing that is competitive to other low-fare transportation providers such as bus and train operators”.