Japanese regional airlines Airdo Co. and Solaseed Air Inc. merged their operations Monday to cut costs and effectively utilize resources amid a slump in travel demand caused by the coronavirus pandemic.

Airdo, headquartered in Sapporo on the northernmost main island of Hokkaido, and Solaseed Air, based in Miyazaki on the southwestern island of Kyushu, will retain their names and current routes under a new holding company, RegionalPlus Wings Corp.

Airdo Co. President Susumu Kusano (center L) and Solaseed Air Inc. President Kosuke Takahashi (center R) pose for photos during a ceremony at Haneda airport in Tokyo on Oct. 3, 2022, as the two Japanese regional airlines merged their operations and launched a new holding company called RegionalPlus Wings Corp. (Kyodo)

With the merger, the struggling airlines aim to reduce costs through the joint maintenance of aircraft and procurement of supplies, they said.

"We will survive the new business environment and provide our customers with more comfortable air travel," Airdo President Susumu Kusano, who also assumes the role of chairman at the holding company, said at a ceremony held at Tokyo's Haneda airport.

Solaseed President Kosuke Takahashi, who was appointed as president of the holding company, said the two airlines will push ahead with improving operations such as customer data sharing to boost sales.

A severe business environment with higher fuel costs exacerbated by a weaker yen is pushing Japan's airline industry to seek joint operations to cut costs.

The county's two biggest airlines ANA Holdings Inc. and Japan Airlines Co. have said they will start code-sharing flights with three regional airlines in Kyushu later this month.

Transport minister Tetsuo Saito welcomed the latest move, telling a press conference, "I hope it will help maintain and further improve their airline services."

The two companies announced the merger plan in May 2021 as their operations were being hit by shrinking demand amid the pandemic.

Airdo and Solaseed suffered net losses in the business year ended March for the second straight year as the number of passengers fell due to COVID-19 restrictions and strict border controls imposed by the government.

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