TROTTINGS = Trip Jottings


Scoop*! Peach & Vanilla to merge!

The All Nippon Airways group plans to merge its Peach and Vanilla airline subsidiaries**, starting this year and finishing before March 2019.


It wants the merged airline to become the leading ‘low-cost airline’ in Asia.


Our comments:


-Neither Peach nor Vanilla is what we define (according to a set of our definitions) no-frills-airlines, see below.


They are an attempt by ANA management to follow an NFA businessplan, but are basically just lower fares and some lower costs. More like an LCA, see below.


-ANA management has shown no clear understanding of the NFA business-model. They thus seem incapable of making Peach-Vanilla bigger than the region’s current biggest, Air Asia, whose various divisions sold about 70mn seats in 2017, according to our counts.


-In 2014 we called ANA’s businessplan for Vanilla ‘soft’***.


-One further indication of this incompetence is the long time to merge these two – 12 months. We believe this should take no longer than three.






*Headline-convenience only; this is not news.


**Peach started flying from its Osaka Kansai base in March 2012 (another mistake; it should have used Osaka Itami airport). ANA’s JV with Air Asia, from Tokyo Narita (it should have been Tokyo Haneda or best Tokyo Ibaraki), started in late 2011 and stopped in late 2013. After that ANA launched Vanilla, also from Tokyo Narita, in December 2013.


***What we said in 2014:

-Its base is Tokyo Narita, the worst choice of three Tokyo airports – best would be Ibaraki, then Haneda.

-It has three destinations in Japan plus Tokyo, plus international to Hong Kong, Kaohsiung (due next February), Seoul, Singapore, Taipei. Generally, a 2-hour maximum flight is better for NFAs – which means Hong Kong, Kaohsiung, Singapore, look to be financial risks.

-Even domestic routes seem to be chosen for their length – Japan’s top north or top south.

-Fares look cheap – US$60 (¥6300) one-way for the shortest route, NRT-Sapporo. But they are fixed – no discounts if travellers book early, no higher if they book late. That is bad for Vanilla’s profits.

-Schedules are not standard. It is better to have, say, 10.00 daily departure to Sapporo. Vanilla has different times and different days.

-Its initial publicity noted flight destinations, aircraft types, flight times, etc. But not fares. For us, the essential items to be included in NFA publicity are two only – Route, Price.




*Notes: Our airline-type definitions:

-FSA = full-service-airline. Offering first/business/economy, travel agency bookings, meals/bookings/baggage/cancellations included, etc. As its name indicates – full service.


-LCA = low-cost-airline. (Not a no-frills-airline; see next.) An FSA but with lower operating costs – cheaper longer-hours flight-deck crew, younger/new longer-hours cabin crew, tighter cost control (twinned 3-star hotel rooms, for example), fewer fare types, may have first and business cabins as well as economy, and which allows bookings through travel agencies etc. If relevant, usually similar to the parent airline, but a different name, and competition against parent airline allowed.


-NFA = no-frills-airline. We believe that among the many essential elements that make a successful NFA are: shorthaul point-to-point routes; market freedom in terms of fares, routes; single aircraft type; where relevant, competition against parent airline allowed; extremely-low fares when bought at least three months in advance, say US$25; one fare at one time (no wholesale rates, travel agency commissions, etc); no refunds; no (free) service frills; single economy-class cabin; no (free) seat selection; two toilets for 150-seat aircraft; 25-minute turnaround time; cabin crew do daytime cabin cleaning; name and flight change charged at least US$25 each; no trade shows; plenty of consumer advertising and promotion; and much more.


The Fox. Remember, I’m an industry expert in the parallel world.