Cut-price airline to change travel in Japan

All Nippon Airways is about to revolutionize transport within Japan and the region after announcing the launch of the nation's first low-cost carrier.

Unveiled on Thursday after a meeting between ANA and representatives of First Eastern Investment Group, a pioneer of direct investments in China, the new airline will make it much cheaper to fly between Japan's largest cities than to take a "shinkansen" bullet train.

The new arm of the airline will also offer cut-price flights to popular destinations in Asia and the Pacific to fend off competition from budget carriers that are already eyeing the lucrative Japanese market.

The new company will be established before the end of the year, with ANA holding a 39 percent stake, other Japanese investors controlling 28.7 percent and the remainder held by Hong Kong-based First Eastern.

The new airline will be headquartered at Kansai International Airport, built on a manmade island off Osaka, and its first flight is scheduled to take off in the second half of 2011, according to company officials.

"Under our corporate vision of becoming the number one airline group in Asia, ANA has been steadily working to substantially improve its network between Japan and Asia," said Shinichiro Ito, president and CEO of ANA.

"Regardless of the intense competition in the air transportation industry, we anticipate an increase in passenger traffic demand in East Asia, and came to the conclusion that a low cost carrier would be the right approach to compete effectively in this market," he said.

The new airline will not fly under the ANA brand but the company will have a low-cost structure, have point-to-point operations using a single type of aircraft, have automated processes, simple services and additional paid-for services.

The vision for the new company also states that on international routes, the company will aim "to stimulate new demand through pricing that is competitive to other low-fare transportation providers, such as bus and train operators."

The airline is apparently planning to sell tickets for the journey between Tokyo's Narita Airport and Kansai International Airport for just Y5,000 (€47.15), just one-third of the price of a shinkansen ticket.

It is also examining international routes that include flying to China and South Korea, with tickets about half the price of major airlines operating on those same routes.

JR

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