ANA plans budget carrier to undercut buses, trains

The Yomiuri Shimbun

All Nippon Airways plans to establish a low-cost carrier under its wing, offering budget fares as low as about 5,000 yen for flights between Kansai Airport and airports in the Tokyo metropolitan area, The Yomiuri Shimbun learned Wednesday.

ANA wants to lure passengers from railways and highway buses by setting the fares at one-third of the ordinary fare for the fastest Nozomi Shinkansen bullet train between Tokyo and Shin-Osaka stations.

The airliner will shortly announce its plans. The planned carrier will start servicing both domestic and international routes in fiscal 2011, centering on Kansai Airport, an ANA official said.

Specific routes will be decided later, the official said.

ANA is considering charging about 5,000 yen on the Kansai-Narita and Kansai-Fukuoka routes and about 8,000 yen on the Kansai-Naha route.

International routes under consideration are flights to and from China and South Korea. ANA aims to set the fares at half of those offered by major airlines.

The envisaged carrier will be branded and operated differently from ANA, recruiting new employees and foreign pilots and adopting a different wage system to achieve major cost cuts.

ANA will become the largest shareholder of the planned carrier, but will invite capital participation from other industries, including freightage, and foreign funds.

Regarding the hiring of executives at the vice-president level, ANA is considering hiring someone with experience working at a foreign low-cost carrier, the company official said.