Despite predicting a record net loss of $4.8 billion for Fiscal Year 2020 (April 2020 to March 2021), Japan-based All Nippon Airways Holding (ANA) unveiled plans on Tuesday to create a new low-cost widebody unit designed for medium-distance flights to destinations in Southeast Asia, Australia, and New Zealand.
Planned for FY2022, the yet-to-be-named “third airline brand” will sit between premium, full-service ANA and the group’s low-cost operating arm, Peach Aviation, and “will be capable of responding to sudden changes in demand,” the airline said. Plans call for the new airline to operate an all-Boeing 787 fleet with more than 300 seats in a two-class layout. Most of ANA’s current Boeing 787-8s and -9s have a three-class configuration, while Peach operates a fleet of A320 family aircraft in a single-class layout.
ANA’s announcement comes as the group embarks on a major revamp of its business structure that includes a raft of new cost-cutting measures to enhance its competitive position and adjust to a “new normal during and post Covid-19,” the airline said. Under a new restructuring plan, ANA will downsize its fleet by bumping the number of airplanes intended for retirement from seven to 35 aircraft in FY2020, including 22 Boeing 777s. The group will also delay the delivery of one 777 and its third Airbus A380. Overall, ANA plans to reduce its fleet to 276 aircraft by the end of the fiscal year, 33 fewer than originally intended.
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Meanwhile, the group said it was looking to rein in cost by dissolving its U.S. subsidiary, the Pan Am International Flight Academy. Headquartered in Miami, ANA bought the training provider for $139.5 million in 2013 with the aim to expand Pan Am into Asia.
Other restructuring measures include revamping its procurement strategy on in-flight goods, maintenance components, and other services, reducing and consolidating office space, and reducing labor costs by shifting outsourced business operations to in-house development. ANA will also undergo voluntary redundancies with plans to transfer more than 400 employees to outside companies.
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The airline hopes to achieve cost savings of roughly $1.4 billion in FY2020 and $1.9 billion in FY2021, while confirming it had secured approximately $3.8 billion in subordinated loans from state-owned and private lenders.
