ANA Aims for Its Growth Focusing Specifically on International Route Network – New Corporate Strategy Includes Launch of B787 into Long-haul International Operations out of Haneda
All Nippon Airways (NH) on February 24 announced its “FY2011-12 ANA Group Corporate Strategy,†centering once again its efforts on the international passenger business segment to keep growing as a global airline. The airline is targeting its consolidated operating revenues for fiscal year 2012 by 14 percent, compared to FY2010, to 1,570 billion yen. In terms of international passenger operating revenues, ANA aims to achieve 387 billion yen, up by 36.3 percent. When the target is met, the ratio of its international passenger operating revenues in the airline’s total operating revenues from air transportation business, including both domestic passenger business and freight business, is expected to increase to 27.1 percent from 23.0 percent estimated for FY2010.
In efforts to achieve the company objective, ANA will aim to enhance its competitiveness, taking advantage of the increased number of departure and arrival slots at Haneda Airport, along with reduction of the flight operations by Japan Airlines (JL). ANA will concentrate its efforts particularly on the Asian region where robust growth is expected. Taking delivery of the Boeing B787 during FY2011-12, the airline plans to introduce the new aircraft on its long-haul international routes out of Haneda Airport. Also, ANA will build up a new route network which is expected to boost its passenger convenience and lead to a profit increase by joint venture with the Star Alliance, and besides, it aims to maximize its profitability by implementing the joint global marketing, joint fares and joint sales.
Furthermore, capitalizing on the website-based sales, ANA anticipates attracting more non-Japanese markets and new customer segments as well. In terms of in-flight services, ANA plans to introduce, during fiscal year 2011, the aircraft installed with “ANA BUSINESS STAGGERED†seats on the airline’s six routes from Japan to Europe and to the United States and the aircraft with “ANA BUSINESS CRADLE†seats on its six to seven routes from Japan to Asian routes.
Aims to Acquire Five-Star Airline Rating from Skytrax to Become “Asia’s No. 1 Carrierâ€
ANA’s company strategy positions its FY2011-12 period as “the two years whereby the airline will re-engineer its business structure to adapt to the ever-changing business environment.†And then, ANA will strive to grow in order to keep its commitment to becoming Asia’s No.1 airline, which is the airline’s corporate vision, based on the pillars of “enhanced business efficiency by maximizing management resources†and “improved basic quality and customer satisfaction.â€
Under these pillars, ANA will concentrate on maintaining and enhancing the airline’s four “basic qualitiesâ€, namely, “safety,†“on-time performance,†“quality and customer satisfaction†and “CSR (corporate social responsibility).†In terms of the quality and customer satisfaction, for example, ANA endeavors to acquire the five-star airline rating from Skytrax. Besides, the airline will carry out a review of the productivity improvement program and the existing group management system as well.
| ANA Corporate Objective | |||
|---|---|---|---|
| FY2010 Forecast | FY2011 Target | FY2012 Target | |
| Operating Revenues | 1,377 | 1,500 | 1,570 |
| Operating Income | 70.0 | 110.0 | 130.0 |
| Operaqting Profit Margin | 5.10% | 7.30% | 8.30% |
| Recurring Profit | 37.0 | 70.0 | 82.0 |
| Net Income | 6.0 | 45.0 | 53.0 |
| Capital Expenditure | 211.0 | 227.0 | 252.0 |
| Interest Bearing Debt | 922.0 | 908.0 | 910.0 |
| Free Cash Flow | 22.0 | 30.0 | 31.0 |
| International ASK | 111.40% | 117.40% | 113.70% |
| Domestic ASK | 99.50% | 103.20% | 99.70% |
* All monetary fugures in yen billions. All pencentages in comparision with previous year.
Source: Travel Vision
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ANA’s international passenger services will see a launch of a daily flight between Tokyo’s Narita and Chengdu in China from June 19. Aircraft to be put into service is Boeing B737-700 configured with 8 Business class and 112 Economy class seats. The airline also plans to increase flight frequency on its Beijing and Shanghai routes from and to Tokyo’s Haneda Airport subject to the aviation agreement to be concluded between Japan and China. The Narita/Beijing and Narita/Taipei’s Taoyuan routes will receive larger aircraft when ANA takes a delivery of additional Boeing B767-300ERs. Its Narita/Shenyang route will get additional flights as well. The airline will continue to add services with the new passenger seats which have been introduced earlier on Boeing B777-300ERs on the Europe and America routes. Newly designed Boeing B767-300ER aircraft will be also equipped with the new seats in an effort to improve product and service, primarily on its Southeast Asia route.
Japan Airlines Corporation. (JALS), Japan Airlines International Co., Ltd (JALI) and JAL Capital Co., Ltd (JLC) submitted the rehabilitation plan on August 31 to the Tokyo District Court. The rehabilitation plan includes the business plan implementing Japan Airlines’ effective fleet plan and its complete withdrawal from the money-losing routes. At the press briefing held later on the same day, Kazuo Inamori, Chairman of Japan Airlines Corporation said, “We regret that we, Japan Airlines have caused enormous concerns to the shareholders and financial institutions.†“Today is the start of Japan Airlines’ restructuring,†continued Chairman Inamori, citing, “We must strive to work hard with untiring efforts according to the business plan and we must even post better results than we are targeting.†He also emphasized, “Japan Airlines must struggle to proceed with the proposed rehabilitation plan so that it should never end up as ‘a pie in the sky’.â€
The business plan formulated includes the complete pullout from the unprofitable routes, changes of the cost structures, concentration of the managerial resources on the air transportation business, personnel downsizing, increase of the route profitability, organizational reform and capability to deal with event risks such as the financial crisis and the outbreak of the H1N1 new influenza seen during the past year. Japan Airlines endeavors to realize early rehabilitation of business by aiming for an operating profit as early as in 2010, which is the initial year of the airline’s rehabilitation plan, and by eliminating its excessive liabilities. 



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