All Nippon Airways Company Limited

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All Nippon Airways Company Limited

Kasumigaseki Building
3-2-5 Kasumigaseki
Chiyoda-ku, Tokyo 100
Japan
(81) 33592 5298
Fax: (81) 33592 3039

Public Company
Incorporated: 1952 as Nippon Helicopter & Aeroplane Transport Co., Ltd.
Employees: 13,387
Sales: ¥ 890.0 billion (US$7.06 billion)
Stock Exchanges: Tokyo Osaka Frankfurt London

All Nippon Airways Company Limited (ANA) is Japan’s second largest airline in terms of revenue, behind the now privatized national carrier Japan Air Lines (JAL). ANA has traditionally been engaged primarily in domestic operations but is now competing aggressively with JAL on the lucrative international routes. ANA started regular flights to the United States in 1986, and flights to Europe and other destinations in the succeeding five years. ANA also has an extensive cargo business. The airline forms the nucleus of the ANA Group, whose activities include hotel and resort operation, travel agencies, trading, and restaurants. Parent company ANA contributes about two-thirds of the group’s total revenue. In terms of passengers carried, ANA ranks in the world’s top ten and is Japan’s leading airline.

The foundation of ANA’s success as an international airline lies in the rapid growth of Japan’s domestic travel market in the 1950s and 1960s. ANA was originally formed in Tokyo in 1952 as Nippon Helicopter & Aeroplane Transport Co., Ltd. The formation came after the signing of the San Francisco Peace Treaty of April 1952, which effectively ended the American occupation of Japan. A new law was passed by the Japanese government which subsequently allowed for the establishment of private airlines, administered by JDAC, the country’s air transport regulatory body. The founder of Nippon Helicopter and its first president was Masuichi Midoro. At the time of its establishment the company had 28 employees, 12 of whom were board members. The new airline began operations in February 1953 using Japanese pilots and a De Havilland Dove on the busy Tokyo-Osaka route. Initially limited to cargo, the flight began passenger service early the next year.

Other private domestic airlines were beginning to be set up within Japan, and by 1953 nine had been granted permission by the government. Notable among these was the Osaka-based Far East Airlines, which gained its operating license in 1953. Far East Airlines was founded by Choichi Inoue, who recognized a market for private air travel and began operations in 1953 between Tokyo and Osaka.

Both Nippon Helicopter and Far East Airlines enjoyed success in the following five years with the expansion of networks in eastern and western Japan respectively based around Japan’s two main cities, Tokyo and Osaka. At the end of 1956 the two airlines agreed to merge to create Japan’s largest private airline. The merged company was called All Nippon Airways Co., Ltd., and the president was Midoro from Nippon Helicopter, the larger of the two companies. Respective networks were combined, and Nippon Helicopter’s logo was adopted on all planes. In 1958 eight DC-3s were put into service and stewardesses’ uniforms were redesigned and standardized. ANA was rapidly proving to be strong competition for Japan’s national carrier JAL on domestic routes. In 1962 Midoro became chairman of ANA, making way for new president Kaheito Okazaki, whose first move was to acquire the much smaller Fujita Airways in 1963. ANA entered the jet age in 1964 when it purchased three Boeing 727s for use on its Tokyo to Sapporo route and for charter flights.

In 1964 Japan National Railways unveiled the “bullet train” for operation between Tokyo, Osaka, another destinations, providing a cheap alternative to air as a means of business travel between Japan’s major cities. Japan’s economy was encountering explosive growth at the time, with the widespread use of the automobile as a means of transport. ANA realized that it was competing for passengers with rail and road as well as other airlines and embarked on a program of expanding both the size and number of jets it operated. ANA was also eyeing its rival JAL’s monopoly on international services from Japan and began lobbying the government to gain access to this lucrative market. A department was formed with the task of preparing for the airlines’s eventual debut into international air travel. The foundation of regular international service was laid in 1971 when ANA operated a Boeing 727 charter flight to Hong Kong, its first foray into the market. In 1973, after 20 years of service, ANA carried its 50 millionth passenger.

In 1973 ANA embarked on a diversification strategy that attempted to exploit the growing tourist trade in Japan. ANA Enterprises, Ltd. was formed to operate hotels around the country. The hotel business now provides an integral part of the ANA Group’s total revenues. Another ANA subsidiary was set up in 1974 with the formation of Air Nippon Co., Ltd. The new airline was intended to serve regional destinations with smaller planes and thus link many remote islands and towns with ANA’s network. At this point ANA had the most extensive domestic network in Japan and, as a privately owned company, was seeking to expand. In 1978 ANA took a minor stake in the newly formed subsidiary Nippon Cargo Airlines, on the assumption that it would have access to international freight markets in the near future.

Both ANA and JAL were at the center of a scandal in the 1970s in which it was alleged that the airlines were influenced by leading Japanese politicians, notably Japanese Prime Minister Tanaka, in their decision to purchase aircraft from United States manufacturer Lockheed. The scandal led to the resignation of the Japanese government and investigation of the airlines by authorities. Scandal aside, ANA introduced the new Lockheed Tristar on its Tokyo to Okinawa route in 1974. Boeing 747s were introduced five years later on the Tokyo to Sapporo and Tokyo to Fukuoka routes. The problem of severe crowding at Tokyo’s Haneda airport was alleviated in 1978 with the opening of the new Tokyo International Airport. From this point on all international travel, which was increasing rapidly, would originate from the new airport at Narita, near Tokyo. By 1980 ANA was the world’s sixth largest airline, although it was virtually unknown outside Japan, with its international services limited to charter flights within Asia.

The Japanese government was, however, preparing to deregulate its international air transport market. This was partly in response to international pressure and partly due to market demand for more flights. Foreign airlines such as TWA had enjoyed access to Japan for years, but the majority of outbound passengers traveled on Japan’s national airline, JAL. Government doubts about the management of JAL began to surface after the crash of a 747 en route to Osaka from Tokyo in 1984. Over 500 lives were lost in the packed jet and negligenct maintenance by JAL was shown to be the cause. JAL was privatized in 1985, and ANA was allowed to compete on international routes. This came after United Air Lines of the United States took over rival United States carrier Pan-Am’s Pacific network. The Japanese government was concerned that Japanese airlines were losing out on the international market and nominated ANA as the second Japanese carrier allowed to fly on overseas routes. ANA was well prepared for this and began cargo service in 1985 and international passenger travel in 1986, with flights first to Guam and then to Washington, D.C., and Los Angeles. The airline became the only carrier to travel between the capital cities of the United States and Japan. ANA initiated its overseas expansion with a huge publicity campaign and a change of logo to the now familiar blue ANA letters on the tail-fin of each plane.

With a firm hold on the slowly growing domestic market (a 50 percent market share) ANA embarked on a huge expansion of its international network. Demand for international air travel was booming as the Japanese economy invested heavily overseas. This demand far outstripped supply with existing landing slots at the main international airports in Tokyo and Osaka inadequate for the traffic. As a result, the government began construction on three major airport projects, including the New Kansai International Airport near Osaka. To meet the huge growth in passenger volume, ANA initiated its ABLE computerized reservation and ticketing system to meet its needs for the foreseeable future. In 1987 ANA added Beijing, Hong Kong, Sydney, and Dalian to its list of overseas destinations and in the following year Stockholm, Bangkok, Vienna, London, Moscow, and Saipan. This expansion of overseas routes, although meticulously planned, required significant logistical effort. ANA obtained listings on the London and Frankfurt stock exchanges in 1991 in order to raise funds for expansion. Training and recruitment were emphasized to such an extent that a 1991 poll of university graduates revealed that ANA was Japan’s most popular company among young graduates. In 1990 ANA established World Air Network, Ltd. (WAC) offering charter flights to destinations in Asia from regional Japanese airports, thus opening up international travel to a larger segment of the population. ANA upgraded its computer reservation system in 1990 with the formation of INFINI, the world’s first reservation system to be operated by a consortium of airlines. ANA’s partners in the venture are Cathay Pacific Airways, China Airlines, Malaysian Airlines, and several others.

ANA, now recognized as a major force in international aviation, is Japan’s largest airline and, as of 1991, the eighth largest in the world. The airline was named “Airline of the Year” in Air Transport World magazine’s 1991 awards. With passenger service among the best in the world, ANA serves some 30 cities in Japan and 19 overseas and operates approximately 500 flights per day. These figures are continually growing as ANA strives to become Asia’s dominant airline.