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Japan’s largest airline is saving money and therefore phasing out the Boeing 777. ANA All Nippon Airways also wants to seize new opportunities with a new low-cost airline.
Winter is also getting bleak in Japan. ANA All Nippon Airways will offer only 15% of capacity in November, 17% in December and 17% in January of the previous year. This is even less than the Lufthansa Group, which calculates 25 percent. There are currently too many entry restrictions and quarantine rules around the world and demand is consequently weak.
ANA All Nippon Airways already suffers severely from the Covid 19 pandemic. In the first six months of fiscal year 2020/21, sales fell 72% to 292 billion yen or the equivalent of 2.36 billion euros. The bottom line is that Japan’s largest airline recorded a net loss of 188 billion yen or 1.5 billion euros.
New opportunities with demanding customers
Therefore, on Tuesday (October 27), the management announced a major restructuring. “ANA embarks on an ambitious transformation that will position the company for long-term growth and success in a market still affected by Covid-19,” commented CEO Shinya Katanozaka. The airline relies on two trends.
Business with corporate clients is expected to never reach the level of the past, Katanozaka said. Because in many companies you have become accustomed to the new digital possibilities. Conversely, a slow return is expected among private customers. Yes, you can even see opportunities with clients for whom the environment and personal health are particularly important.
New tasks for Peach
The ANA group wants to appeal even more to the group of demanding customers with the main brand All Nippon Airways. More digitization should help offer an even more personalized service. Low-cost airline Peach caters to short-haul routes in Japan and Asia. It is also expected to attract more families in the future and will therefore be brought closer to ANA All Nippon Airways, for example by linking frequent flyer programs. At the same time, Peach will also carry freight in the future.
ANA will create a new low-cost airline for flights to Southeast Asia and Oceania. It is built on the basis of the Air Japan subsidiary for small loads and holidays. So you can get started quickly. The airline’s name is not yet known.
33 fewer aircraft than expected
It is clear, however, that management plans to start with the new airline in 2022. The fleet will consist of Boeing 787s with more than 300 seats. “The brand will help us react quickly to changes in demand,” says ANA.
Since the recovery will be slow, the group will also have to save. In addition to savings on purchases, office rentals, sales or the closure of unprofitable areas, the increased use of synergies is also a reduction in the fleet. ANA All Nippon Airways will have 33 fewer aircraft than the original plan by the end of fiscal year 202/21.
Boeing 777s are decimated in the fleet
ANA is making cuts especially in its long-haul fleet. It will be reduced by 24 jets, 22 of which are Boeing 777s. In addition to two 777 freighters, the group currently owns 19 777-200s and 36 777-300s.
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