All Nippon Airways (ANA) plans to make changes to its network, cut staff and procurement costs, and introduce new "value services" in order to secure an additional ¥30 billion ($315 million) in revenue by the end of this fiscal year.
The Japanese carrier reported a net loss of ¥29.2 billion for its fiscal first quarter, saying that the recession and fears about the HINI flu virus adversely affected its operations. Revenues for the three months ended 30 June fell by 21.9% to ¥269.8 billion, offsetting a 5.6% fall in costs to ¥312.3 billion.
As a result, the Star Alliance member has unveiled an "Emergency Income Recovery Plan" to save ¥30 billion, in addition to ¥73 billion yen in cost-cutting measures it announced earlier this year.
"Domestic and international passenger numbers came under enormous pressure in the first quarter of FY2009. Given that operating environment, ANA will suspend or reduce service where necessary, and change aircraft type to better match demand until immediately before departure, in order to improve passenger load factors," says ANA.
The airline will cut services from Tokyo's Narita Airport to Shanghai to twice-daily from thrice-daily on 25 October. It will also operate a smaller Boeing 777-300ER on its Tokyo-Hong Kong services instead of a Boeing 747-400 from 25 October.
From 25 December to 4 January 2010, it will also operate a 777-200ER instead of a Boeing 767-300ER on its Tokyo-Honolulu flights, and use a 767-300ER instead of a 777-200ER on one of its two daily Narita-Shanghai flights.
On the domestic front, it is suspending services on the Oshima-Hachijojima route, from Osaka-Kansai to Matsuyama, Kochi and Kagoshima, from Fukushima, Toyoma and Komatsu to Sapporo-Chitose, and from Kumamoto and Miyazaki to Okinawa.
Kansai-Fukuoka will go down to twice-daily on a jet aircraft from four-times daily on a turboprop, and the Fukuoka-Sendai will come down to a daily service from twice-daily.
It will, however, increase the Nagoya-Okinawa service from thrice-daily to four times daily. It is also planning to introduce a Fukuoka-Ishigaki seasonal operation.
In the cargo market, ANA will postpone a decision that was due this fiscal year on a new fleet of widebody freighters. It also plans to operate flights with greater flexibility, given the relaxation of the "use it or lose it" rule for take off and landing slots.
On the cost front, ANA will roll out unpaid leave options to the entire company. This was previously available only for selected divisions. Non-personnel related costs related to sales, third party contracts and outsourcing will be reduced. General procurement costs, which come up to around ¥220 billion yen annually, will also be systematically cut.
The airline is also introducing "Pay for Value" services on its flights. This includes, at a fee, premium class meals to domestic economy class passengers and business class meals to international economy class passengers. More customers will also be allowed access to domestic and international lounges.
"Services that are gradually being rendered redundant by changing customer tastes and developments in information technology will gradually be replaced or removed," adds ANA. This includes suspending toll free calls for domestic and international reservations, and stopping the provision of newspapers in domestic and international economy class.
Source: Air Transport Intelligence news
