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ANA prepares for more global partnerships

New chief says even a minority stake makes a difference

ANA prepares for more alliances.

TOKYO -- All Nippon Airways is preparing itself for a rapidly changing airline industry. Restrictions imposed on rival Japan Airlines, after receiving official support, were lifted in late March. Yuji Hirako, who became president and CEO of ANA in April, told The Nikkei about challenges facing the company prior to fiscal 2020, when passenger numbers are expected to swell in accordance with the Tokyo Olympics.

ANA President and CEO Yuji Hirako.

Q: As JAL's financial outlook improved, restrictions imposed on it, such as investing in peers, were lifted. What do you make of this?

A: Alliances between airlines, including those for JAL, are expected to increase. In recent years, we have seen tie-ups between American Airlines and China Southern Airlines, and between Delta Airlines and China Eastern Airlines.

Although these airlines could only take limited stakes due to restrictions on foreign investment, this kind of strategy cannot be ignored as long as even a minority stake would make a difference.

 Our holding company ANA Holdings also acquired a stake in Vietnam Airlines last year. Although investment decisions will be made by ANA Holdings, ANA will play a leading role in areas such as code-sharing and ground handling. We will have to look for global partners as a group.

Q: Both ANA and JAL launched flights between Tokyo's Haneda Airport and New York's John F. Kennedy Airport through April. Do you think competition between the two airlines will increase?

A: Given that there has been strong demand for the Haneda-New York route, both airlines will likely benefit from it.

Departure and arrival slots at Narita and Haneda Airports will remain roughly flat over the next two years. The airlines may devise different strategies for utilizing early and overnight flights at Haneda.

Q: ANA's expansion policy will slow for the current and next fiscal years. What plans do you have?

A: In recent years, we have added two to four new international destinations annually. From this fiscal year, we want to review key operations, such as safety and punctuality, as well as enhance existing routes by strengthening booking and sales activities.

Q: Last fiscal year, ANA implemented structural reforms, such as cutting regular flights of its unprofitable cargo business. What is your next move?

A: Our cargo business requires a complete overhaul. ANA Group includes ANA Cargo, which handles our airline network, and Overseas Courier Service, which handles international logistics.

OCS plans to launch a new logistics facility in Tokyo's Koto Ward in October that consolidates the two logistics centers. This will double or triple our handling capacity, which is expected to boost sales.

We also want to distinguish ANA from our competitors by growing cross-border e-commerce. We have already partnered with a company that has a patent for its system of facilitating customs procedures. Overall, we want to increase demand this fiscal year.

Interviewed by Nikkei staff writer Yusuke Hinata

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