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February 20, 2024
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All Nippon Airways (ANA) wants to increase its operating income to ¥200 billion and net income to ¥122 billion in FY25, up from the goal of ¥120 billion and ¥63 billion respectively for FY23. Revenues should increase to ¥2.3 trillion over the next two years from ¥1.7 trillion in FY22, while the interest-bearing debt should be reduced to ¥1.1 trillion, the Japanese airline said today in its mid-term strategy update. All Nippon Airways targets aggressive growth until FY25.

ANA already said last year that post-pandemic, it wants to become more profitable from its airline and non-airline business by growing its national, international, leisure, and cargo business, while realizing cost efficiencies through digitalization and labor savings. The updated strategy, which was first announced in October, aims for sustainable growth over the coming three years until and including FY25.

The airline business targets an increase in market share and profit by adjusting the network, including routes, frequencies, and schedules. Parent airline ANA will restore and increase its international routes out of Tokyo Narita and Haneda and concentrate its domestic network on core routes. Low-cost subsidiary Peach will focus on short-haul international routes in Asia to capture inbound and leisure demand, mainly from Narita and Osaka Kansai. Both airlines should operate at 105 percent capacity in FY25 compared to FY19.

ANA’s much-anticipated, and frequently delayed, third brand AirJapan is set to launch services out of Narita in the second half of FY23. Its focus is on inbound and leisure traffic from major cities in Southeast Asia, where there are opportunities for growth. Fares that can rival those of other LCCs should give AirJapan a competitive advantage over rivals and within ANA.

ANA Cargo, which contributed strongly to the airline’s results during the Covid crisis, should grow capacity to 110 percent in FY25. It will concentrate on the growing markets between Asia and North America. Freighter routes will be consolidated at Tokyo Narita and capacity on full freighters for oversized and special cargo should be maximized.

All Nippon’s fleet will grow slowly as far as aircraft numbers are concerned, but there will be changes. ANA and Peach had 267 aircraft in FY22, but this should grow to 290-295 in FY25 including AirJapan. There will be an increase in the share of mid/narrowbody aircraft from 72 to 80 percent until FY30 versus FY19 or from 103-107 to 110-115 aircraft, while the share of widebodies will drop from 20 to 15 percent. Many of them will be Boeing 787s, of which ANA will operate 100 in FY30 or 35 percent of all capacity. The share of aircraft used for international business will grow from 40 to 45 percent in FY30. By then, 90 percent of ANA’s fleet will be new, fuel-efficient aircraft.

ANA says it will expand its business to next-generation mobility. A year ago, the airline announced a partnership with Joby, developing concepts and routes around Osaka when World Expo 2025 opens 2025.

The non-airline business should generate ¥400 billion in annual revenues in FY25 and an operating income of ¥24 billion by creating new businesses and optimizing resource allocation. The company confirms its plans to expand digitalization through the ANA Smart Travel app, one-to-one marketing, and virtual business opportunities.

 

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Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.

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