Japan's ANA lines up low-cost carrier in bet on post-COVID tourism boom

TOKYO (Reuters) -Japanese airline ANA Holdings Inc plans to launch a new international low-cost carrier in late 2023 or early 2024, joining its rival Japan Airlines Co in a bet on a revival in tourism as the impact of the COVID pandemic fades.

ANA said on Tuesday the carrier, Air Japan, would fly mid-range international flights to Asia-Pacific destinations, without disclosing planned routes. ANA already has a separate low cost carrier (LCC), Peach Aviation, which flies domestic routes as well as to a handful of short-haul Asian destinations.

The launch plan comes as airlines around the world have been hammered by the collapse in international travel triggered by the pandemic, and are now grappling with uncertainty and higher fuel costs sparked by the crisis in Ukraine.

Air Japan will fly to destinations more than four hours from its base at Tokyo's Narita airport to differentiate itself from Peach, said Hideki Mineguchi, Air Japan President, speaking during a news conference.

"The new brand (Air Japan) is a new model that combines the best aspects of full service and LCC in terms of offering affordable prices," Mineguchi said. The carrier didn't disclose details but said Air Japan customers will be able to pay more for some services on top of the ticket price.

The carrier would rebrand Boeing 787 airplanes with around 300 seats that ANA has used for international flights.

Target customers would be families and students in Asia who want to visit Japan, as well as those who live in Japan wanting to travel to Asian countries on a budget once the pandemic is over, Mineguchi said.

Air Japan had been aiming to commence services by the financial year beginning next month at the earliest, but was forced to delay the start due to the COVID-19 pandemic. Japan Airlines founded its low cost carrier for mid-range international travel, Zip Air, in 2018.

The launch plans comes amid signs the outlook for tourism is brightening in Asia.

The Indonesian resort island of Bali this week welcomed its first foreign tourists under relaxed coronavirus rules that don't require quarantine, similar to programmes already in place in Thailand and the Philippines.

(Reporting by Satoshi Sugiyama; Editing by David Dolan, Shri Navaratnam and Kenneth Maxwell)

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