Peach Aviation Ltd. and Vanilla Air Inc., two low-cost carriers under the ANA Holdings Inc. umbrella, have entered into the final phase of negotiations to integrate, according to sources.
The LCCs are considering unifying their brands into Peach by 2020, although details on the management structure are expected to be decided later. The aim of the integration is to compete with foreign rivals by improving the efficiency of equipment use and expanding flight route networks.
ANA Holdings holds 67 percent of the shares of Peach Aviation, which is based at Kansai Airport. Vanilla Air is a wholly owned subsidiary of ANA Holdings and based at Narita Airport. As the two carriers have little overlap in either domestic or overseas flight route networks, they judged that the envisaged integration would generate significant synergy. The carriers are also aiming at a full-fledged entry into medium-range route operations connecting Japan and Southeast Asia by around 2020.
For their integration, one possibility is for Peach Aviation to absorb Vanilla Air. Under this scenario, Peach Aviation would take over Vanilla Air's employees and equipment. However, there is a cautious view within ANA Holdings about such a merger plan, so another plan to integrate them in stages is also being considered.
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