ANA’s new budget carrier already faces skepticism

Bloomberg

ANA Holdings’s plan to launch a new low-cost carrier has doubters, given the coronavirus pandemic’s impact on airlines worldwide and an industry trend towards retrenching.
The company said it will launch a new budget brand around fiscal year 2022, targeting medium-distance flights to Southeast Asia and Oceania. That coincided with the carrier unveiling a restructuring plan involving cost reductions and halted plane orders.
“There are significant risks over whether this can be a success,” Goldman Sachs Group analysts including Ben Hartwright said. There have been few successful regional carriers and the launch of the new brand may impact ANA’s cost efficiencies and add complexities to its operation, the analysts said. The carrier is predicting its biggest-ever operating loss of $4.8 billion for this fiscal year as the pandemic decimates demand.
James Teo, an analyst at Bloomberg Intelligence, said it may not be a good time for ANA to launch a new brand given the investment it requires.