ANA’s new budget carrier faces skepticism even before it flies

ANA Holdings' plan to launch a new low-cost carrier has doubters already, given the coronavirus pandemic’s impact on airlines worldwide and an industry trend toward retrenching. The company said Tuesday 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 Inc. analysts including Ben Hartwright said in a report Wednesday. 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 Y505b ($4.8b) 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. ANA will try to prevent the new brand from cannibalizing the business of its existing budget carrier, Peach Aviation Ltd., President Shinya Katanozaka said at a news conference.<br/>