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Peach Aviation and Vanilla Air to merge
March 23rd 2018
Japan’s ANA HOLDINGS (ANA HD), representing Japan’s biggest airline group, announced on Thursday that its majority owned low-cost subsidiaries, Peach Aviation and Vanilla Air, would be integrated over the next two years to create a stronger single carrier to facilitate expansion and contend with increasing competition across Asia. Read More »
Following completion of the merger, planned for fiscal year end 2019 (March 31, 2020), the merged carriers will probably be operated under the Peach brand.
The two LCCS occupy second and third places in Japan’s budget carrier rankings. Their combined sales in the fiscal year ending March 31, 2018, are 76 billion yen (US$716 million). The numbers surpass the current market leader, Jetstar Japan, a joint venture between Japan Airlines and the Qantas group.
“We have been considering combining the companies for some time,” ANA HOLDINGS president, Shinya Katanozaka, said. “Now is a good time because both companies’ business performance is healthy and inbound traffic to Japan from overseas is on a strong upward trend.”
Peach Aviation was the first low-cost carrier to be launched in Japan when it started operations from Osaka Kansai Airport in March 2012. Today it has a staff of 926 and operates 20 A320s to 15 domestic and 14 regional routes.
Vanilla Air, with 650 employees, was launched from the ashes of a joint venture LCC between All Nippon Airways and AirAsia Japan. Its main base is at Narita and it flies 14 A320s on seven domestic and seven international routes.
From 2020, the integrated budget subsidiary will have more than 50 aircraft operating on more than 50 routes. ANA HD said the integration would “combine and further enhance the strengths the two LCCs have today”, while creating “a stronger competitive advantage to further promote not only the Japan domestic service, but also capture the strong demand for visitors to Japan”.
By 2020, ANA HD plans for the integrated budget carrier to enter the mid-haul LCC market “to aggressively incorporate the growing travel demand in Asia” and support the Japanese government’s goal of 40 million visitors to Japan in 2020.
ANA HD will increase its holding in Peach from 67% to 77.9% following the acquisition of shares valued at 11.3 billion yen from First Eastern Aviation Holdings. The transaction, to take place in April, will reduce the latter's equity in the restructured carriers to 7% from 17.9%. Additional reporting by Geoffrey Tudor in Tokyo
