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7JetSet7 Code: VNL
Status: Operational
Region: ORIENT
Country: JAPAN
Employees 477
Web: vanilla-air.com/en
Email: info@vanilla-air.com/en
Telephone: +81 47 6205-216

Click below for data links:

Formed in 2011 and started operations in 2012. Originally was a low cost carrier (LCC) joint venture (JV) between All Nippon Airways (ANA) (67%) and AirAsia (AWE) (33%) named AirAsia Japan (WAJ). Later AirAsia (ASW) dropped out and (ANA) took control, re-naming the carrier Vanilla Air (VNL). Domestic, regional & international. scheduled & charter, passenger & cargo, jet airplane services.

Shiodome City Center
Minato, Tokyo, Japan


July 2011: All Nippon Airways (ANA) and AirAsia (ASW) announced their AirAsia Japan (WAJ) Joint Venture (JV) at a press conference.

August 2011: Following its formal establishment, AirAsia Japan (WAJ) was headquartered alongside All Nippon Airways (ANA) in Japan. Its main operating base was at Narita International Airport and initially it was to serve domestic destinations utilizing the brand and service model of AirAsia (ASW). Future planned international destinations included the Philippines, South Korea and Taiwan. (ASW) Group (CEO), Tony Fernandez also indicated that the (JV) hub at Narita could serve as a connecting point between Southeast Asia and the USA with the AirAsia Group network.

September 2012: All Nippon Airways (ANA) officially applied to Japan's Legal Affairs Bureau to establish its planned joint venture (JV) Low Cost Carrier (LCC) with AirAsia (ASW) to be called AirAsia Japan (WAJ).

(ANA) said it would apply for an Air Operator's Certificate (AOC) for AirAsia Japan (WAJ) "with the aim of beginning low-cost operations from August next year." (WAJ) was to be based at Tokyo Narita.

(ANA) said it would initially invest ¥10 million in the (JV), with its total investment eventually rising to ¥5 billion/$65.1 million, giving it a 51% stake.

Kazuyuki Iwakata, (ANA) VP International & Regulatory Affairs, was named (CEO) of AirAsia Japan (WAJ). (WAJ) plans to operate both domestic and international flights.

AirAsia Japan (WAJ) is the 1st low cost carrier (LCC) to be based at Narita. Its formation was announced only 2 months after (ANA) announced the formation of Peach (PCA), Japan's 1st low cost carrier (LCC) based at Kansai International Airport in Osaka. (ANA) elected to partner with the existing low cost carrier (ASW) for efficiency and a strategic advantage.

February 2012: AirAsia Japan (WAJ) received its Air Operators’ Certificate (AOC) from the Civil Aviation Bureau of the Ministry of Land, Infrastructure, Transport & Tourism.

The new low-cost carrier (LCC), which planned to begin operations from August, was based at Tokyo Narita. International services were scheduled to launch October 1. From 2013, it planned to offer A330 services to Thailand, Indonesia, and Singapore.

(ANA) Group (CEO) Shinichiro Ito said, “This is a start of a new age in Japanese aviation history with a full-fledged low-cost carrier (LCC) beginning operations in the largest aviation market in this country this year for the first time. We aim to generate new demand in this industry together as a whole. (ANA) believed that AirAsia Japan (ASW) would make air transport more accessible and provide a convenient and efficient travel option for a wide range of people.”

June 2012: AirAsia Japan (WAJ) has taken delivery of its 1st A320-200 (151, JA8384) that has been transferred from parent, (ANA) - All Nippon Airways.

August 2012: AirAsia Japan (WAJ) commenced operations on August 1st and launched altogether 3 domestic routes in the last week out of its new Tokyo Narita (NRT) base with its 2 180Y-seat A320 airplanes. All 3 routes faced competition from the same 4 airlines; (JAL), (ANA), Jetstar Japan, and Skymark (SKM). AirAsia Japan (WAJ) saw its 1st 2 flights take off with load factors of 80% LF and 87% LF. AirAsia (ASW) Group’s (CEO) Tony Fernandes said: “This is a dream come true for all of us at AirAsia (ASW). It has only been 1 year since we announced (WAJ)’s establishment and now we already have 2 A320 airplanes, 243 staff in Japan, and 3 domestic routes on the day we start our operations.”

September 2012: As AirAsia Japan (WAJ) neared its 1st full month of service, its attention was turning to what international markets to serve. While (WAJ) had previously filed schedules to offer a daily return from each Seoul and Busan from October 1st 2012, (CEO), Kazuyuki Iwakata said those services would be pushed back to the 2nd half of October 2012 at the earliest, following a delay in the delivery of its 3rd A320.

In addition to Korea in the international market, Mr Iwakata expected (WAJ) to focus on mainland China as well as Taiwan. In addition to the 2 destinations offering high demand, they would be Japan's 2nd and 4th largest international markets. "Open skies" agreements were also signed, with Taiwan in November 2011 and China in August 2012, a further testament to Japan's breathtaking liberalization that was ushering a new era in once stagnate N Asia.

November 2012: AirAsia Japan (WAJ), which only commenced operations on August 1st, decided to go international and set up its 1st South Korean route on October 28th. (WAJ) offered daily services on the 1,300 km route across the Sea of Japan from Tokyo Narita (NRT) to Seoul Incheon (ICN). Kazuyuki Iwakata, (WAJ)’s (CEO), said: “The announcement of new international routes to Korea gives him much pleasure as they could now further expand the AirAsia (ASW) Group’s existing extensive route network, connecting Japan and other countries in Asia. It made much sense to begin their international flights to Korea, their next-door neighbor.” Competition in the market is fierce. Already operating on the route are Korean Air (KAL) (28x-weekly), Asiana Airlines (AAR) (21x-), (JAL) (14x-), (ANA) (7x-), Delta (DAL) (7x-), Eastar Jet (7x-) and United Airlines (UAL) (7x-). The addition of the new AirAsia Japan (WAJ) service brought the combined number of weekly seats offered on the route up to almost 25,000. (WAJ) had already announced the launch of its 2nd route to South Korea with services to Busan scheduled to start the end of the month.

1 A320-216 (5200, JAO2AJ), AirAsia (ASW) leased to AirAsia Japan (WAJ).

December 2012: AirAsia Japan (WAJ) launched its 2nd S Korean route from Tokyo Narita airport (NRT), following the launch of services to Seoul Incheon airport in late October. On November 27th, (WAJ) added services from the Tokyo airport to Busan airport (PUS), located on the SE most tip of the Korean peninsula. Daily, A320-operated flights face competition from existing services by (JAL) (26x-weekly frequencies), Air Busan and Korean Airlines (KAL) (7x- each).

February 2013: AirAsia Japan (WAJ) confirmed earlier rumors and based an A320-200 at Nagoya Chu-bu Centrair International Airport (NGO) from March 31 to launch 2 new domestic routes from the airport to Fukuoka Itazuke (FUK) and Sapporo Chitose New Sapporo International (CTS) airports. It served Fukuoka 2x-daily and Sapporo on a daily basis. (WAJ) already operated from Tokyo's Narita airport to Busan Gimhae (PUS), Fukuoka, Okinawa Naha (OKA), Sapporo (CTS), and Seoul Incheon International (ICN) airports.

March 2013: AirAsia Japan Company Ltd (WAJ) is a low cost carrier (LCC) headquartered in Tokyo, Japan. (WAJ) was a joint venture (JV) between All Nippon Airways (ANA) and AirAsia (ASW). It was the 9th subsidiary for (ANA) and 5th subsidiary for (ASW). The 1st flight for (WAJ) operated on August 1st 2012 from Tokyo Narita to Fukuoka.

(IATA) Code: JW. (ICAO) Code: WAJ - (Callsign - WING ASIA).

Parent organization/shareholders: All Nippon Airways (ANA) (67%); AirAsia (ASW) (33%).

Main Base: Narita International Airport (NRT), Tokyo.

Domestic Destinations: Fukuoka (Fukuoka Itazuke Airport (FUK)); Nagoya (Chubu Centrair International Airport (NGO) - starts March 31, 2013); Okinawa (Naha Airport (OKA)); Sapporo (New Chitose Airport (CTS)).

Proposed Domestic Destinations: Aomori; Kagoshima; Komatsu; Kumamoto; Okayama; Osaka (Itami Airport); Osaka (Kansai Airport (KIX)).

Short-haul International Destinations:


Busan (Gimhae International Airport (PUS); Seoul (Incheon International Airport (ICN)).

Proposed Long-haul International Destinations:


April 2013: AirAsia Japan (WAJ) commenced services on 2 routes, 1 domestic and 1 international, from its 2nd base in Nagoya (NGO) on April 26. (WAJ), which already served Fukuoka with 2x-daily services from Nagoya, now offered a 2nd domestic destination from Japan’s 3rd-largest city, as it flew with daily frequencies to Sapporo Chitose (CTS). In addition to the Sapporo service, AirAsia Japan (WAJ) also commenced operations on its 1st international route from Nagoya and now connects it with a daily service to Seoul Incheon (ICN). Competition in both markets was significant, and the airline faced (ANA) (42x-weekly flights), Japan Airlines (JAL)/(JAS) (35x-), Jetstar Japan (14x-) and Skymark Airlines (SKM) (14x-) on the 1,000 km domestic route, as well as 2x-daily flights from both Asiana Airlines (AAR) and Korean Air (KAL), and daily flights from Jeju Air (JJA) on the route to South Korea. Both newly launched routes were operated using (WAJ)’s fleet of A320s.

June 2013: All Nippon Airways (ANA) parent company, (ANA) Holdings Inc established an investment management company in Singapore focused on growing its Asian business. The new company called Strategic Partner Investment began business with an initial capital of SGD 120,000/$95,000. Kazuyuki Iwakata is the company’s Managing Director (also (CEO) of AirAsia Japan (WAJ)).

The new company “mainly managed the investment operations of (ANA) Holdings. The company will focus on strategic investments in Asia, improving synergies with the (ANA) Group’s airline business and maximizing earnings,” (ANA) said.

(ANA) has a joint venture (JV), AirAsia Japan (WAJ), with low-cost carrier (LCC) AirAsia (ASW), but there was speculation that the partnership might end.

July 2013: AirAsia Japan (WAJ) commenced new international service on July 3, when it connected its Tokyo Narita (NRT) base and Taipei Taoyuan (TPE). The daily A320-operated service faced competition from China Airlines (CHI) (24x-weekly flights in the week commencing July 15), (EVA) Air (14x-), Japan Airlines (JAL)/(JAS) (14x-), (ANA) (7x-), Cathay Pacific (CAT) (7x-), Delta Air Lines (DAL) (7x-) and Scoot (SCT) (7x-).

August 2013: All Nippon Airways (ANA) parent, (ANA) Holdings re-branded AirAsia Japan (WAJ) as “Vanilla Air,” by which name the Tokyo-based low-cost carrier (LCC) was to be known from November 1.

(ANA) Holdings ended its partnership with AirAsia (ASW) on the AirAsia Japan (WAJ) joint venture (JV) in June, acquiring AirAsia (ASW)’s shareholding and moving to operate the carrier as a wholly owned subsidiary of (ANA) based at Tokyo Narita. (ASW) will fly mainly to domestic and regional resort destinations. (ANA) said "Vanilla Air" (VNL) was selected as the brand because the “simple and sophisticated flavor of Vanilla is popular worldwide” and conveys a “relaxed and satisfied” feeling. It said it wanted passengers to come to know Vanilla Air (VNL) for “easy and no stress” flying.

Vanilla Air (VNL) remains based at Narita airport and starts flights at the end of this year with 2 passenger planes. The company is targeting mainly customers who are interested to travel to resort destinations.

“We will begin with short-distance services but want to expand the range to mid- and long-distances in line with (ANA)’s branding strategy,” Ishii said, adding that it would also increase the number of airplanes to 10 in 2015.

All of (WAJ)’s 420 staff will now become employees of Vanilla Air (WAJ).

October 2013: Japan’s Vanilla Air (VNL) has decided, despite being separated from the AirAsia (ASW) Group, to continue managing its maintenance with (AMOS).

November 2013: Vanilla Air (VNL), Japan’s newest low-cost carrier (LCC), based at Tokyo's Narita Airport has taken delivery of its 1st A320 on lease from (AWAS) (AWW). (VNL) will start commercial services December 20 from Tokyo Narita Airport to Okinawa and Taipei, gradually expanding services to Sapporo and Seoul Incheon, as well as international holiday resort destinations.

Vanilla Air (VNL)’s A320 is configured with 180Y seats in an all-economy (Y) layout. The A320 is equipped with sharklets and powered by (CFM56) engines.

Vanilla Air (VNL), formerly known as Air Asia Japan, is now wholly owned by (ANA) Holdings.

February 2014: Vanilla Air (VNL), the new wholly-owned low cost carrier (LCC) subsidiary of All Nippon Airways (ANA), launched its 3rd and 4th routes during this month. From its Tokyo Narita (NRT) base, it now operates 3x-daily flights on the 790 km route to Sapporo Chitose (CTS) as well as 2x-daily flights on the 1,230 km route to Seoul Incheon (ICN). Competition is considerable on both routes, with 4 competing airlines on the domestic route and 6 on the route to South Korea. Route competition as follows:
Tokyo Narita (NRT) to Sapporo Chitose (CTS) 21x-weekly, vs Jetstar Japan (JJP) 28x-wkly, (Japan Airlines/(JAL)/(JAS) 21x-wkly, All Nippon (ANA) 14x-wkly, and Skymark Airlines (SKM) 14x-wkly;
(NRT) to Seoul Incheon (ICN) 14x-wkly vs Asiana Airlines (AAR) 28x-wkly, Korean Air (KAL) 23x-wkly, (JAL)/(JAS) 14x-wkly, Jeju Air (JJA) 14x-wkly, Eastar Jet (EJS) 7x-wkly, and United Air Lines (UAL) 7x-wkly.

All Nippon Airways (ANA) has inked a deal with (IBS) Software for the implementation of two next-gen solutions to manage the Passenger Reservations and Flight Operations of Vanilla Air (VNL), the (ANA) Group’s new Narita-based low-cost carrier (LCC).

March 2014: SEE ATTACHED - - "VNL-2014-03-UPDATE-A/B/C."

Vanilla Air (VNL) is a low cost carrier (LCC) in Japan, wholly owned by All Nippon Airways (ANA).

(IATA) Code: JW. (ICAO) Code: VNL - (Callsign - VANILLA).

Main Base: Narita International Airport (NRT).

Domestic Destinations: Amami Airport (ASJ), Naha Airport Okinawa (OKA); and Sapporo New Chitose Airport (CTS).

International Destinations: Seoul Incheon International Airport (ICN); and Taiwan Taoyuan International Airport (TPE).

Vanilla Air (VNL) also announced future service to Guam and Saipan at an unspecified date, Hong Kong from November 2014, and Kaohsiung from February 2015, and in the longer term, plans to offer long-haul service to Indonesia.[

May 2014: Vanilla Air (VNL) is to continue its conservative growth, while pivoting towards the international market. All Nippon Airways (ANA)'s 2nd attempt at a Tokyo-based low cost carrier (LCC) remains a conservative effort. Vanilla Air (VNL), the re-branded AirAsia Japan (WAJ), now operates 6 A320s, up from the peak of 5 that AirAsia Japan (WAJ) operated.

(VNL) is planning for a fleet of 10 A320s by March 2016, representing significantly slower growth than seen at Japan's 2 other new (LCC)s, Peach (PCA) and Jetstar Japan (JJP). The majority of Vanilla (VNL)'s capacity (ASK)s are in the domestic market, but within 5 years, (VNL) expects to derive 70% of revenue from the international market.

Vanilla Air (VNL) will shortly add its 4th domestic destination, Amami, while the international market is experiencing some setbacks. (VNL) would like to add services to Taipei, but (VNL) has been unable to secure slots. Taiwan and Korea have been popular short-haul markets from Japan, but the Japan - Korea market continues to experience a setback due to tension.

July 2014: Vanilla Air (VNL), the airline that evolved out of the original AirAsia Japan (WAJ), has introduced a new destination to its Tokyo Narita (NRT) based network. On July 1st, the All Nippon Airways (ANA) subsidiary began daily flights on the 1,300 km route to Amami Oshima (ASJ), using its 180Y-seat A320s. The airport is located on one of the Satsunan Islands to the south of the Japanese mainland. Although there is no direct competition, Japan Airlines (JAL)/(JAS) offers daily flights from Tokyo Haneda to Amami Oshima. The other routes served this summer by Vanilla Air (VNL) from Tokyo Narita are Sapporo Chitose (6x-flights), Okinawa/Naha (3x-daily flights), Seoul Incheon (2x-daily flights), and Taipei Taoyuan (2x-daily flights).

August 2014: Vanilla Air (VNL) plans to launch regular flights linking Narita International Airport near Tokyo with Hong Kong in November and with Kaohsiung in Taiwan in February 2015, company officials said. (VNL) plans to initially operate 3 round-trip flights per week between Narita and Hong Kong, increasing services to 2x-daily by the end of next March, while launching a daily round-trip service between Narita and Kaohsiung.

"We'd like to place more emphasis on international flight business hereafter," Vanilla Air (VNL) President, Tomonori Ishii said at a press conference in Tokyo.

Vanilla Air (VNL), based in Narita, Chiba Prefecture, is due to announce detailed flight schedules next month.

September 2014: Vanilla Air (VNL), has appointed Pacific Aviation Marketing (HK) Limited as its General Sales Agent (GSA), to enter the Hong Kong and Southern China market. Pacific Aviation's experienced sales and marketing professionals are responsible for the long-term positioning of (VNL) as a quality budget airline whilst promoting its services and network to Hong Kong people.

Coming soon in November 2014, (VNL) will launch the Hong Kong to Tokyo (Narita) route, with 3x-weekly flight services using A320s airplanes with 180Y seats.

(VNL) and Pacific Aviation Marketing are working closely in preparation of the new route. For the convenience of Hong Kong people, an official Hong Kong traditional Chinese website and a Hong Kong facebook page will also be launched.

Airfares and ticket sales date of the Hong Kong route will be announced soon.

Vanilla Air (VNL) operates 3 domestic routes to Sapporo (New Chitose), Okinawa (Naha) and AmamiOshima; and 2 international routes to Taipei (Taoyuan) and Seoul (Incheon). The Tokyo to Hong Kong route will commence in November 2014 with 3x-weekly.

The concepts of (VNL) are "Simple", "Excellent" and "New Basic". Focusing on leisure and resort destinations, (VNL) is dedicated to providing convenient, quality, and affordable flights that will become the new basic of air travel.

November 2014: Vanilla Air (VNL), the fully-owned (LCC) subsidiary of All Nippon Airways (ANA), launched 3x-weekly (Tuesdays, Thursdays, Sundays) flights on November 2nd between Tokyo Narita (NRT) and Hong Kong (HKG). Frequency will increase to daily (from February 1st 2015) and then 2x-daily (from February 21st). The 2,940 km route will be operated by the (VNL)’s A320s and will face competition from Cathay Pacific Airways (CAT) (28x-weekly flights), All Nippon Airways (ANA) (14x-) and Japan Airlines (JAL) (7x-). Hong Kong becomes Vanilla Air (VNL)’s 6x- route from Narita, with a 7x- (Kaohsiung in Taiwan) launching in February 2015.

February 2015: Vanilla Air (VNL) has launched its 4th international route from Tokyo Narita (NRT), and 7th in all, using its 180Y-seat A320s. On February 1st (vnl) began daily flights on the 2,429 km sector to Kaohsiung (KHH), its 2nd destination in Taiwan after Taipei. Competition on the route is provided by China Airlines (CHI), (EVA) Air and Japan Airlines (JAL), all of which also operate daily flights.

March 2016: "More (LCC)s Expand to Philippine-Asia Pacific Region"
by (ATW) Jeremy Torr, March 15, 2016.

As low-cost carrier (LCC) Cebu Pacific Air (CEB) launches its 1st service to a USA territory, Japan-based (LCC) Vanilla Air (VNL) said it also intends to expand across the Pacific region. In addition, Philippine Airlines (PAL) has also announced a new Saipan to Manila service.

All the carriers are increasing services on the strength of expanding tourism numbers across the Pacific region, and the attraction of a low-key entry to USA jurisdiction through Guam and Saipan.

Guam tourism spokesperson Nathan Denight said the new (CEB) A320-based service offers a “new opportunity to further connect our island and serve as the gateway to Micronesia and other regions of the world.”

Describing its new Manila to Guam route as “another expansion path across the Pacific,” (CEB) confirmed it is committed to expanding operations across the region.

Concurrently, Philippine Airlines (PAL) (CEO) Jaime Bautista announced a new Saipan - Manila schedule to start from June 2016. The service will offer a 2x-weekly service using A320-200 aircraft (again a 1st to the Pacific USA territory for the airline, since it attempted a short-lived service to the island in 1990).

Also eyeing the Pacific market, Japan-based (LCC) Vanilla Air (VNL) plans to expand to destinations including Guam, Saipan and Cebu from its home base at Tokyo Narita. These will add to its current lineup of local destinations using “beyond rights,” by offering a 1- or 2-stop schedule via SE Asian countries. These could potentially include Singapore, Thailand, and Vietnam, from (4Q) 2016, if permissions are granted.

April 2016: A320-214 (7080, JA09AV), registered to (ANA) Trading Mercury Leasing.

June 2016: "Value Alliance: the Hubs, Focus Airports and Routes Where Alliance Members Might Gain Synergies", by (CAPA), June 20, 2016.

Since the Value Alliance was announced in May 2016 as the 2nd low cost carrier (LCC) alliance, there has been industry interest about how and where the alliance can deliver synergies. The nine initial members of the Value Alliance include Cebu Pacific (CEB), Cebgo (SRQ), Jeju Air (JJA), Nok Air (NKA), NokScoot (NSC), Scoot (SCT), Tigerair Singapore (TGR), Tigerair Australia (TAU) and Vanilla Air (VNL).

Tokyo Narita is the alliance hub with more service from Value members (5) than any other. But Asia's most popular airports for Value members are not where the alliance has a local member: Taipei and Hong Kong.

In terms of frequency, Manila and Bangkok Don Mueang have the most Value flights, reflecting their local membership there. The local Value member based at an airport typically dominates the hub, accounting for >90% of Value flights. That creates a strong feed network for other members but also (potentially) competition that may be too strong. Members overlap on only 6 routes so far and their combined frequency gives them a scale advantage against non-Value (LCC)s. Although it is premature to evaluate the effectiveness of the alliance (new members will join and existing members will grow) this analysis looks at where there are network opportunities for cooperation.

* Airports most frequented by Value Alliance are not member hubs.

There are services from 3 or more members of the Value Alliance at 15 airports in Asia. This includes Tigerair (TGR) and Scoot (SCT), which have the same ownership, but excludes Cebu (CEB) and Cebgo (SRQ), since (CEB) owns (SRQ). (TGR) and (SCT) are expected to merge, with only one brand surviving.

5 airports have services from 4 or more alliance members. The 2 most popular airports (Taipei Taoyuan (6) and Hong Kong (5)) are not local hubs for the Value Alliance. 3 airports have services from 4 Value members: Hanoi, Osaka Kansai, and Tokyo Narita. Only Tokyo Narita is a Value hub (served by Vanilla Air (VNL)), although Osaka Kansai is a growing focal point for (VNL) and in time, will likely become a hub.

Taipei is home to 2 (LCC)s: Tigerair Taiwan (TTW) and V Air (VAX) (but neither is a member of Value (or of U-FLY)). (TTW) is 10% owned by the Tigerair Holdings but is not a member, and is expected to be wholly under control of the China Airlines (BEJ) Group, once the expected Tigerair (TGR)/Scoot (SCT) merger occurs. V Air (VAX) is owned by TransAsia (FSH) and has no partnership affiliations. (FSH), a full service regional airline, is not a member of a global alliance.

It is not without coincidence that the most commonly served airports are in NE Asia. Taipei and Hong Kong are accessible from both SE Asia and northern NE Asia with narrow body aircraft, making the 2 airports accessible for all members. Only Jin Air (JIN) (not an alliance member) is a NE Asian wide body (LCC) operator, so NE Asia’s (LCC)s are restricted from flying deep into SE Asia.

In contrast, SE Asia has 3 wide body (LCC) operators that are belong to an alliance: Scoot (SCT), NokScoot (NSC) and Cebu (CEB). Cebu (CEB) can access NE Asia with narrow body aircraft, although it sometimes uses wide body aircraft on trunk/congested routes. There are services from three Value members at 10 airports, and all but three are Value member hubs.

* Measured by frequency, most services are at Value alliance member hubs.

This analysis next looks at the largest airports in the Value Alliance based on weekly frequencies. This analysis comprises the 21 largest airports (the 20th and 21st largest have the same number of frequencies). The 6 largest airports are all member hubs.

The 4 largest (Manila, Bangkok (DMK), Singapore, and Cebu) are significantly larger than the rest. Of the 10 largest airports based on member frequency, only 2 (Hong Kong and Taipei Taoyuan) are not member hubs.

* Largest Value Alliance airports are dominated by their members.

13 of the region's largest airports have >7 daily flights from alliance members. Each is dominated by its local alliance member. At the 2 largest (Manila and Bangkok (DMK)) the local alliance hub member operates 98% and 94% of all flights by the alliance. In other words, of all Value flights at Manila, Cebu (CEB) operates 98% at Manila, while NokScoot (NSC) and Nok (NKA) operate 94% of all Value flights at Bangkok (DMK).

A Value Alliance Member typically accounts for over 90% of alliance flights at its home. 4 airports are around the 80% mark, while there is no Value Alliance member operating flights at Bangkok (BKK) (they instead operate out of Bangkok (DMK)).

* Value Alliance members overlap on 6 routes.

There is a possibility that the Value Alliance could help (LCC)s gain scale on routes, especially where due to infrastructure constraints ( slots, air traffic, bilaterals) organic growth may not be an option.

In the week commencing June 12, 2016 the Value Alliance members overlap on only 6 routes. This excludes overlap only between Scoot (SCT)/Tigerair (TGR) (owned by the same company and expected to be merged) and Cebu (CEB)/Cebgo (SRQ) (Cebu (CEB) owns Cebgo (SRQ)). (CEB) has the most overlap (4 routes) followed by Jeju (JJA) (3), Tigerair (TGR) and Scoot (SCT) (2) and then Vanilla Air (VNL) (1).

No route has >2 operators. The frequency split varies between relatively even and lopsided. As this analysis is focused on the opportunity to offer more flights, frequency (not seats) is considered. The use of wide bodies at Scoot (SCT), and sometimes Cebu (CEB), would alter a capacity share analysis.

* Value Alliance opportunity to link NE Asia with SE Asia.

The geography of east Asia means that (LCC)s cannot serve the entire region with existing narrow body technology, although (LCC)s in some markets can come close. The final analysis in this report considers the ability of the Value Alliance to link NE Asia with SE Asia, and vice versa.

6 of the members have routes between NE and SE Asia. Vanilla Air (VNL) operates wholly within NE Asia but is examining a Taipei base to use 5th freedom rights to fly to SE Asia. Cebu Pacific (CEB) has the greatest number of flights between NE and SE Asia. This is probably unsurprising given the Philippines' geographical position, which is more between the regions. Tigerair (TGR) and Scoot (SCT) have approximately 10 routes between the regions.

Evaluating the opportunity is complex: routes are often to points where there is no service from another Value member, or there is limited frequency, and it may not enable a same-day connection, or a connection within reason. Some connections would be circuitous. But as noted earlier, it is too soon to evaluate the opportunity for the alliance.

* Outlook: long haul operator, member with central geography, could bring opportunity but also competition.

The Value Alliance faces the same conundrum as full service alliances: adding members brings opportunities but also competition. A member that is more central between the regions (such as in Hong Kong or Taiwan) could enable more links and connection opportunities.

Alternatively, that member may prefer to serve points on its own. (As (CAPA) has previously recorded, some Value members are expected to work with HK Express outside the (LCC) alliance organizations). More long haul operations could mean that an airline gains access to the strong regional hub of a partner in a different part of Asia. Alternatively, this could preclude cooperation between other members.

The opportunities for the Value members today are varied, but they do exist. With time, the synergies within the alliance should become greater. Most critically, this is all being developed with minimal cost, unlike the high joining and membership fees of full service alliances. While the gains may not seem as significant, neither are the costs.

Conclusion: As (CAPA) has previously concluded of the alliance:

* Joining the Value Alliance should be an appealing option for Asia’s independent (LCC)s since the cost and risk of membership are small. At the May 16, 2016 launch event, executives representing the founding members stressed that the concept is to add incremental passengers without incurring additional cost or adding any complexities. The members said that they would not have joined, if they had not been able to retain their business models.

* The main objective is for each member to increase their brand awareness across Asia-Pacific. The main objective is for each member to increase their brand awareness across Asia-Pacific and augment their distribution network through cross-selling. The alliance members pointed out that most of their brands are not well known outside their respective home markets.

* The members expect that the alliance will only generate a small increase in their interline traffic volumes (at least in the initial phase).

* Interline traffic for most members is a very small part of their overall business (for some it has even been non-existent) and most members do not expect that interline traffic will ever account for a large share of their overall traffic.

* The Value Alliance essentially offers its members a nothing-to-lose alternative for attempting to increase transit traffic and attract passengers in new markets who are now flying with other airlines. Even if the alliance only brings each member a +1% incremental gain in passenger traffic, it can be deemed a success, given the limited cost and the simplicity of the new offering.

* Asia’s independent (LCC)s need to evolve and embrace new alternatives if they are to maintain their growth trajectory and succeed in an increasingly competitive marketplace.

July 2016: Japan’s All Nippon Airways (ANA) low-cost carrier (LCC) subsidiary Vanilla Air (VNL) will add multiple new routes this year, thanks to the planned delivery of more narrow body aircraft. (VNL) has 9 Airbus A320s, and is scheduled to receive +3 by the end of its fiscal year on March 31, 2017. These aircraft are scheduled to arrive in October, November and February, Vanilla Air Executive VP Hiroshi Kitahara said. Most of this year’s deliveries will be leased from (BOC) Aviation (SIL).

January 2017: Vanilla Air (VNL) plans to launch new routes from Osaka and Tokyo over the next few months as (VNL) looks to expand its domestic network. A daily flight from Osaka Kansai International Airport to the island of Amami Oshima is scheduled to begin March 26 using Airbus A320s. (VNL) already flies between Tokyo Narita and Amami Airport, a route it introduced in 2014.

February 2017: A320-214 (7543, JA12VA), ex-(F-WWBI), (BOC) Aviation (SIL) leased.

August 2017: China Aircraft Leasing Group (CALC) (CHD) delivered a new Airbus A320 aircraft to Vanilla Air (VNL), a subsidiary low cost carrier (LCC) owned by (ANA) Holdings in Japan. This delivery follows the lease agreement signed between (CHD) and (ANA) in July 2016, and marks (CHD)’s foray into Japan’s aircraft leasing market.

December 2017: South Pacific carriers Air Calin (CLN) and Air Vanuatu (VAN) signed a code share agreement, connecting New Caledonia’s capital Noumea and Port Vila, with 6x-weekly flights from January 1, 2018.

February 2018: News Item A-1: Japan’s (ANA) Holdings (the parent company of All Nippon Airways (ANA), Peach Aviation (PCA) and Vanilla Air (VNL)) expects profits at its 2 low-cost carrier (LCC) affiliates to grow fastest until 2022 as the carriers continue to expand. (ANA), which published its mid-term corporate strategy for 2018 to 2022 on February 1, expects the 2 carriers to double their operating income in the next 5 years as they grow the fleet from the current 35 airplanes to 55. Peach (PCA)’s main base is at Kansai International.

News Item A-2: "Jetstar Japan to Boost Fleet Expansion" by Adrian Schofield, (ATW) Daily News, February 17, 2018.

Japanese (LCC) Jetstar Japan (JJP) intends to ramp up its fleet expansion rate over the next few years, following a period of relatively low growth.

(JJP) plans to add 3 Airbus A320s in 2018, which will boost its fleet to 24, an airline spokesman said. (JJP) expects its fleet total to rise by 4 more in 2019, giving it 28 of the aircraft by the end of that year.

This represents a significant change in momentum for (JJP). The last time Jetstar Japan (JJP) added an A320 was in March 2017, and prior to that, its fleet size remained unchanged from December 2014. (JJP) is a joint venture between Japan Airlines (JAL) and the Qantas (QAN) Group.

For the upcoming northern-hemisphere summer season, (JJP) will fly 12 domestic routes, as well as international services to Hong Kong; Manila, Philippines; Shanghai; and Taipei, Taiwan.

This is an increase of 1 route for both the domestic and international networks compared to summer 2017. (JJP) added a flight from Tokyo Narita Airport (NRT) to Shanghai Pudong International Airport in June 2017, and a domestic route from (NRT) to Miyazaki in December. (JJP)
does not have any plans to add more international destinations at the moment, the spokesman said.

Rival Japanese (LCC)s are also planning fleet growth over the next few years. Peach (PCA) intends to add 3 A320s in the fiscal year beginning April 1, which would increase its fleet to 23. Vanilla Air (VNL) is scheduled to receive its 15th A320 before the end of March, and another is scheduled to arrive in the subsequent fiscal year.

Both Peach (PCA) and Vanilla (VNL) are subsidiaries of (ANA) Holdings, and the parent company has said it wants to boost its combined (LCC) fleet to about 55 aircraft by 2022.

News Item A-3: Japan’s Ministry of Land, Infrastructure, Transport & Tourism (MLIT) is working to seek private-sector improvements in running the country’s 28 (MLIT)-owned airports after deciding the airports put a ceiling on aviation growth, especially (LCC)s, tourism and the economy. Japan has a total of 97 airports.

March 2018: "(ANA) Subsidiaries Peach, Vanilla Study Potential Merger"
by Adrian Schofield, (ATW) Plus, March 19, 2018.

All Nippon Airways (ANA) (LCC)s Peach Aviation (PCA) and Vanilla Air (VNL) are reportedly holding discussions regarding a potential merger. According to local media, the negotiations are aimed at combining the 2 operations by 2020, most likely under the Peach (PCA) brand. When asked about the reports, (ANA) told (ATW)’s sister publication Aviation Daily, “At this time, we are not able to comment on any speculation or confirm any details.”

Later, however, All Nippon Airways (ANA) has confirmed it will merge its (LCC) subsidiaries Peach Aviation (PCA) and Vanilla Air (VNL), after boosting its shareholding in (PCA). The process of fully integrating the 2 (LCC)s will begin in the 2nd half of (ANA)’s 2018 fiscal year, which begins April 1. Parent company (ANA) Holdings aims to complete the merger by the end of (FY) 2019. The company was previously reported to be considering such a move. The integrated carrier will be based on (PCA), which is the larger of the 2 airlines.


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VNL-A320-200 - 2014-07

December 2018:

4 A320-200 (CFM56). 180Y.

4 A320-200 (CFM56), (BOC) AVIATION (SIL) LEASED. 180Y.

2 A320-200 (CFM56), (AWW) LEASED 2013-11. WITH SHARKLETS. 180Y.

1 A320-214 (7080, JA09AV), (ANA) TRADING LEASING LEASED 2016-04. 180Y.

1 A320-214 (7543, JA12VA), ex-(F-WWBI), (BOC) AVIATION (SIL) LEASED 2017-02. 180Y.

3 A320-216 (CFM56) (5844, /13 JA01VA; 5903, /13 JA02VA; 5926, JA03VA), EX-(F-WWIN & F-WWDC), (AWW) LEASED 2013-12. WITH SHARKLETS. 180Y.

0 A320-216 (5153, /12, JA01AJ; 5200, /12 JA02AJ; 5325, /12 JA03AJ; 5547, JAO4JJ, 2013-03; 5657, JAOSAJ, 2013-07), EX-(F-WWDH; F-WWIX; F-WWBP; F-WWBJ). (ASW) LEASED. ALL RETURNED TO (ASW). 180Y.


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