ANA Holdings Inc. said Tuesday it will launch a new lower-cost airline brand called AirJapan focusing on medium-range international flights in fiscal 2023 as it bets on a recovery in travel demand in a post-coronavirus era.
The new service will use Boeing 787-8 aircraft, providing "comfortable" space between seats, and the fares will be at "an affordable price range similar to low cost carriers," the company said.
Although details such as exact routes and the date of the first flight are not finalized yet, an ANA official said it plans to connect Japan's Narita airport, near Tokyo, with Asian and Oceanian cities.
The announcement comes as the Japanese major airline is propelling a structural reform to better counter fallout from the COVID-19 pandemic.
In the restructuring plan released in October 2020, the company said it would create a new brand designed to meet demand for travel that its flagship subsidiary All Nippon Airways Co. and low-cost carrier Peach Aviation Ltd. cannot cover, while cutting costs and shrinking the size of its fleet.
The new service will combine the strengths of both full-service and low-cost carriers, while featuring Japanese-style hospitality, it said.
"We can operate routes that may not be profitable in All Nippon Airways' cost structure," Hideki Mineguchi, president of Air Japan Co. said at a news conference in Tokyo.
Meanwhile, the holding company, which is projecting a net loss for a second straight year for the year ending this month, is ramping up efforts to improve its balance sheet hit by a demand slump due to the pandemic.
All Nippon Airways is set to raise prices for domestic flights that allow rebooking by 3 percent on average from fiscal 2022, according to a corporate source familiar with the matter.
Profits from the price hike will be used to maintain its route network including unprofitable ones, the source said.
