Japan’s ANA Holdings plans to merge two of its low cost subsidiaries to better compete in the competitive budget market in Asia.
A merger of Peach Aviation and Vanilla Air is expected to be completed by 2020.
ANA has a 67% shareholding in Peach while Vanilla Air is wholly owned.
Peach and Vanilla are currently the second and third largest carriers in Japan’s low cost market, and a merger will eclipse the market share of current front runner Jetstar Japan.
Although ANA hasn’t confirmed it, the combined business will likely operate under the Peach Aviation name.
There is only one current overlapping route in the carrriers’ network as Peach operates out of Osaka and Vanilla from Tokyo, while both operate similar Airbus fleets.
The consolidation will enable the new airline business to compete in the short to mid-haul international market.
Currently the two airlines only fly short international services mostly to South Korea, Taiwan and Hong Kong.
