Japanese regional carriers to merge

(PHOTO: Air Do)

Use this oneTwo Japanese regional carriers confirmed Monday (31 May) that they would merge their companies in 2022 as a result of the COVID-19 pandemic and its effects on the aviation industry. Air Do, based in Hokkaido, and Solaseed Air, based in Miyazaki, said they had signed a “basic agreement” regarding the establishment of a joint holding company and the two companies will join the group with the aim of establishing a joint holding company by October 2022.

The reason for this establishment is that “we are facing an extremely difficult situation that we have never experienced, such as a significant decrease in aviation demand due to the spread of the new coronavirus infection,” the companies said in announcing the merger.  “In order to recover the financial base at an early stage, survive the new business environment, provide more added value to customers, and achieve sustainable growth, we will further deepen the business alliances and cooperative relationships between the two companies. Judging that it is extremely important to efficiently utilise the management resources of Air Do and maximise economies of scale, it is the best choice to build a strong management base through the establishment of a joint holding company.”

The two companies said they aim to reduce costs by standardising operations and sharing knowledge as much as possible and to “promote efforts to increase profits by co-creating new value”. As the first step, the two companies will open a joint special site and will launch a campaign starting in July under the name of “Let’s travel the whole country with two wings”. Campaigns such as the ability to exchange mileage between the two companies for a limited time will also begin.

Airdo operates a popular route between Tokyo’s Haneda Airport and Shin-Chitose Airport near Sapporo, the main gateway to Japan’s northernmost main island. Solaseed Air has routes connecting the island of Kyushu and Haneda.

On Monday, Airdo posted a net loss of 12.1 billion yen (US$110 million) for fiscal 2020 ended March this year. Solaseed Air also said on Monday that it had a net loss of 7.6 billion yen last fiscal year.

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