ANA Holdings announced that it has signed a memorandum of understanding toward making RegionalPlus Wings a wholly owned subsidiary, and explained the background and structure of the integration.
RegionalPlus Wings is a holding company established in October 2022 that owns AIRDO and Solaseed Air. AIRDO operates 64 daily flights on 11 routes, while Solaseed Air operates 80 daily flights on 14 routes.
As background to the integration, the company cited the slow recovery in high-yield business demand following the COVID-19 pandemic, population decline and labor shortages, rising fuel and maintenance costs due to the weak yen, and increased costs from DX investments that had been restrained during the pandemic. It also explained that the abolition in May of restrictions on equity investments by major airlines in mid-sized airlines, following discussions by an expert panel of Japan’s Ministry of Land, Infrastructure, Transport and Tourism, led to the current consideration. Previously, Haneda Airport takeoff and landing slots were reclaimed when an investment exceeded 10%.
ANA, AIRDO, and Solaseed Air already operate codeshare flights, with ANA selling around 30% to 40% of seats. On routes to and from Haneda Airport, there is a limit of 50% or less. ANA said that being able to sell 100% of the seats itself would provide the greatest benefit in terms of revenue.
During the initial integration phase, three functions—route planning, procurement, and revenue management—will be centralized at an early stage. For route planning, ANA’s business planning division will balance supply and demand, including flights operated by AIRDO and Solaseed Air. The company plans to redirect the aircraft and crew resources freed up through this process to international services, a growth area. It will also use economies of scale in procurement to reduce aircraft and fuel purchasing costs. Functions for developing and maintaining airport facilities will also be consolidated.
For the time being, both the AIRDO and Solaseed Air brands will be retained, and their codeshare arrangements with ANA will continue. There are currently no plans to change the mileage programs. In the medium term, ANA will consider integrating the brands under the ANA name, although no timeline has been set. Discussions will proceed with consideration for the understanding of local communities and employees. The company said that brand integration and corporate integration will be considered separately, and that no decisions have been made at this time regarding the treatment of the operating companies.
Regarding Haneda Airport slots, it is expected that slots within the 10% limit will be reclaimed from a combined total of 49 slots—23 held by AIRDO and 26 held by Solaseed Air. The company expects transitional measures to apply to the timing of the reclamation and will coordinate with the Japan Civil Aviation Bureau. It also said there is a possibility, though not a certainty, that the Japan Fair Trade Commission could require the surrender of additional slots as part of its merger review. While recognizing that the merger review would not be easy, the company said that competitive conditions would be assessed on a route-by-route basis and that competition concerns could very well be raised on some routes. Adjustments to flight frequencies and fares will only be possible after the review is approved.
Regarding staffing, the company explained that it does not anticipate any workforce reductions after the airlines become group companies. No decisions have been made at this time regarding the discontinuation or reduction of regional routes.
The operator of the Embraer aircraft scheduled to be introduced from 2028 has not yet been decided. The company said it will consider the matter in the future, including AIRDO and Solaseed Air.
Under the planned schedule, ANA Holdings aims to conclude a share exchange agreement in late December, obtain approval at an extraordinary general meeting of shareholders of RegionalPlus Wings in February 2027, and make the transaction effective on April 1 of the same year. As approval of the merger review is a prerequisite, the schedule could be delayed.
Notice
This article was generated using automatic translation by GPT-4 API. The translation may not be accurate.
