World Economy

2 Japan Airlines Plan Merger

2 Japan Airlines Plan Merger2 Japan Airlines Plan Merger

Japanese airline group ANA Holdings has decided to consolidate a pair of budget carriers under its wings by 2020 to create a more robust organization better positioned to compete in the growing Asian market, Nikkei reported. ANA will merge consolidated subsidiary Peach Aviation with wholly owned Vanilla Air. The units rank second and third among domestic low-cost carriers, with their combined sales of roughly 76 billion yen ($716 million) in the year ended March 2017 eclipsing domestic leader Jetstar Japan. Details of how they will be combined will be settled later, but the Peach brand is expected to survive. Asian aviation demand is forecast to grow more than 5% a year over the next two decades.  Big budget carriers in the Asian-Pacific market, such as Australia’s Jetstar group and Malaysia’s AirAsia group, turn in annual sales equivalent to between 200 billion yen and 300 billion yen. Through confronting cost and other issues, consolidating Peach and Vanilla will let ANA take on the international competition and tap more Asian demand.

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