Will Japan have a taste for Vanilla?

ANA wastes no time in launching new carrier to replace failed AirAsia Japan.

by GEOFFREY TUDOR 

September 1st 2013

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It’s déjà-vu all over again as All Nippon Airways Holdings (ANA) launched Vanilla Air, their third low-cost carrier (LCC) in two years, last month.Read More »

Vanilla Air president, Tomonori Ishii: hoping the 420 employees of AirAsia Japan will transfer to Vanilla Air

Some purists might say it was really only two, because wholly-owned Vanilla Air Inc. is basically the bare bones of AirAsia Japan, the ill-fated joint venture between the ANA Group, Japan’s largest airline, and AirAsia, the world’s largest LCC group.

It won’t take long to put some flesh back on those re-branded bones in the form of aircraft to replace AirAsia’s A320s and a revived route network focused on leisure destinations.

In the past two years, three home-grown LCCs have launched in Japan. The first was Peach Aviation, an ANA affiliate. Soon afterwards ANA announced its deal with AirAsia to create AirAsia Japan, which prompted Japan Airlines (JAL), then undergoing rehab after bankruptcy, to tie the knot with Qantas’ Jetstar to launch Jetstar Japan.

Vanilla will start business on November 1, the day following the end of operations by AirAsia Japan. Ticket sales will begin in the same month, with flight operations starting in late December.

Vanilla Air Inc. is a wholly-owned subsidiary of ANA Holdings. The president is  Tomonori Ishii, an ANA veteran, whose qualifications to head the new LCC include three years in charge of sales and marketing at Air Do, a low-fare ANA affiliate, based in Hokkaido, northernmost of Japan’s four main islands.

He also brings with him years of hands-on experience in passenger handling at airports in Japan and Asia as well as heading ANA’s U.S. representative office.

The new LCC will connect mainly between Tokyo (Narita) and domestic and international resort destinations. Later, flights will operate from Chubu (Nagoya). Details of destinations and flight frequencies will be announced later this month.

Domestic points are likely to include Sapporo – a top resort destination in both winter and summer - and semi-tropical Okinawa, famous for pristine beaches and sunshine for summer vacationers. It is also developing as a winter destination where increasing numbers of mainland Japanese are seeking milder winters with long stays and second homes.

But much of the emphasis for Vanilla will be on international routes. The portfolio will include Taiwan, South Korea, Saipan and Guam, all popular short stay destinations. Ishii pointed out that yields are higher on international routes and Narita’s curfew would not negatively impact flight operations.

Aircraft used will be sub-leased A320s. Ishii said the company plans to have five or six aircraft in service by the northern Spring of 2014.

In the long-term, ANA planners have said that Hawaii could be a Vanilla destination from both Narita and Chubu although such routes would need larger capacity and longer range equipment.

Ishii said at a press conference in Tokyo last month that he hoped the 420 current employees of AirAsia Japan – which includes about 100 cabin attendants and 60 cockpit crew – would continue with Vanilla Air.

Vanilla’s name and branding strategy, Ishii explained, was based on the fact that “the simple and sophisticated flavor of vanilla is popular among people worldwide. Besides, the aroma makes people relaxed and satisfied”.

The blue and yellow design of Vanilla Air’s logo is inspired by a vanilla flower, with yellow petals opening up to symbolize the connections of the airline’s routes with the world. ‘Vanilla Air’ is written in sea blue.

Said Ishii: “Our three principles are: first, we are simple - simple to choose and use. Second is excellence – stable and high quality Japanese service. Thirdly, setting a new basic standard in air travel.”

Where AirAsia Japan tended to focus on young people, Vanilla Air will aim at families, couples, retirees and groups, added Ishii, whose demands are not ruled by time constraints.

As its core market, Ishii said the new airline would focus on the leisure and tourism sector concentrating initially on serving and selling to the Narita Airport core catchment area which takes in the southern area of Ibaraki Prefecture to the north, the upper half of populous Chiba prefecture and Tokyo’s eastern approaches.

This may appear low key, but adds up to nearly five million people, about the same as the population of New Zealand.

ANA planners believe by lowering airfares they can stimulate demand and persuade once a year travellers to consider twice a year trips. Or maybe passengers travelling to Guam can travel to Hawaii.

The forthcoming arrival of Vanilla Air could also help consumers have a clearer idea of what the new home-made LCCs are all about.

After a few initial bumps, Peach hasn’t had much trouble in setting itself up as the Osaka region’s “national carrier”. It is busy winning hearts and minds in the traditional commercial centre, locally known as the Kansai.

Osakans are novelty seekers and bargain hunters and Peach has delivered attractive packages, such as one-day shopping trips to Korea.

It sees itself internationally as the Kansai region’s own link to Asia and is developing a hub in Okinawa as a springboard to destinations such as Hanoi.

Narita-based Jetstar Japan is concentrating on building its domestic network. The carrier has put international route plans on hold for the time being. Recently, it passed the two million passenger mark.

AirAsia Japan served domestic and international routes out of Narita, but in its short life failed to make a mark, which could be attributable to the management squabbles about style that led to its demise. It is to be hoped that Vanilla Air succeeds where AirAsia Japan failed.

So what lessons are to be learned from the early departure of the once-lauded joint venture between ANA and AirAsia?

In announcing the end of AirAsia Japan some weeks ago, ANA senior vice-president, Shinzo Shimizu, admitted they had learned things from AirAsia, such as the need for simple reservations systems, fast aircraft turnaround and staff multi-tasking.

But he also pointed out where they believed their partners had erred. These included poorly designed web sites, which were unfriendly to Japanese customers, check-in limits that were too early and a general lack of basic passenger service, which were witheringly condemned as “not up to task for Japanese customers”.

It may have been hubris, but AirAsia Japan’s management collectively were slow to use the crucially important travel agency and convenience store distribution systems in Japan  with which Peach and Jetstar Japan are today well familiar.

We shall see. Perhaps there will be a thriller in Vanilla.