Low-cost operations of Japan's ANA to focus on resort travel: Nikkei

Tue Jul 30, 2013 3:24pm EDT

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(Reuters) - Japan's ANA Holdings Inc (9202.T) plans to beef up its low-cost-carrier operations by focusing on resort travel to places such as Guam and Hawaii, the Nikkei said, citing company sources.

While the company's lead carrier All Nippon Airways will cash in on high-priced business travels, its budget airlines will target tourists headed overseas, the paper said.

ANA bought AirAsia Bhd (AIRA.KL) out of a Japanese budget airline joint venture for 2.45 billion yen ($24.99 million) last month, dissolving a loss-making alliance after less than two years.

This unit will now become a resort-oriented carrier, ANA said on Tuesday, the Nikkei said.

"In the Tokyo metropolitan area, business travelers can depart Haneda, and the Narita-based budget flyer can capture tourism demand," Shinzo Shimizu, ANA senior vice-president, was quoted as saying in the Nikkei.

Name of the new airline, which plans to start with two aircraft, will be announced in August. The company plans to increase the fleet to five aircraft by March, the Japanese business daily reported.

While the domestic flights will be limited to popular tourist destinations such as Sapporo and Okinawa, overseas resort destinations will be included later, the Nikkei said.

The airline will include Hawaii among its other destinations by the summer of 2014, the paper said.

Unlike European and U.S. budget airlines, which focus on business travelers, ANA plans to target families and other tourists looking to travel overseas, the paper reported.

ANA's other low-cost carrier Peach Aviation will also strengthen its tourist-based operations by launching an Okinawa-Taiwan route in September, the paper said.

(Reporting By Kanika Sikka in Bangalore; Editing by Maju Samuel)

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