The parent company of Japanese carrier All Nippon Airways (ANA), ANA Holdings, plans to issue nearly ¥150 billion worth of bonds. Proceeds will be used to support its business structure reform plan announced in October 2020, redeeming maturing bonds, and repayment of long-term debt. The zero coupons convertible bonds are set to be issued in December 2021, will have a ten-year term, and that the company will fully redeem the bonds in December 2031, says ANA Holdings in a Tokyo Stock Exchange disclosure.
Out of the ¥150 billion figure, around ¥70 billion has been set aside to redeem bonds that will mature in September 2022, while nearly ¥30 billion will be used to repay the long-term debt that is due by March 2024.
The remaining ¥50 billion has been allocated “to promote further our business structure reform plan, including investments in reforming our service model and establishing our new third brand.” This third brand will operate under the name of Air Japan, an existing ANA subsidiary originally formed in 1990 that currently operates passenger and cargo flights out of Narita International airport to Bangkok, Hong Kong, and Singapore using Boeing 767s and 787s.
ANA Holdings’ plan for Air Japan is to operate low-cost, medium-haul flights to destinations in Southeast Asia and the Oceania regions, using Boeing 787s configured with more than 300 seats. It said in October last year that it intends to have the brand established for such operations “around fiscal 2022,” which runs from 1 April 2022 to 31 March 2023. The latest filing seems to indicate that the launch has slipped until at least the start of FY24, which starts in April 2024.
As for the reforming of its business model, ANA Holdings said in October 2020 that the company will launch a data platform business, driven by its airline and non-airline operations. ANA would be “transforming the services of the Group’s airlines to cater to a wider range of customer needs in price range and services” and “transform the services of each airline to match the values of the “new normal” during and post COVID-19, and through strengthening the cooperation in its marketing activities and smooth migration among the brands, actively promote measures to maximize the lifetime value of our customers.”
Under the revised model laid out in the Business Structure Reform Plan, ANA will remain the premium brand, offering new products and services, and bringing growth that continuously generates profit. Peach will expand its customer base from leisure to business travelers through wider cooperation with ANA, opening up new medium-haul markets after the arrival of the Airbus A321LR. Air Japan would at low-cost, medium-haul to its portfolio. It will focus on the low-cost medium-haul segment in Southeast Asia and Oceania, targeting growth markets in these regions.
Air Japan was formed in June 1990 as World Air Network and rebranded to Air Japan in July 2000, initially offering charter services only. In 2001, it operated its first international service between Osaka and Seoul. In March 2003, Tokyo Narita-Honolulu became the first international scheduled service. The carrier had a fleet of eighty aircraft, all coming from ANA, and including two Boeing 767-300s, 28 -300ERs, 22 Boeing 787-8s, and 28 -9s.
During the first six months of the financial year 2021, ANA Holdings posted an operating loss of ¥116 billion despite total company revenue coming in at more than ¥431 billion. Net loss for the period came in at ¥98.8 billion.
(Additional reporting by Richard Schuurman)