All Nippon Airways Decides to Go High Profile : Japanese Carrier Kicks Off Major Campaign in U.S.

In July, 1986, when All Nippon Airways began flying from Tokyo to Los Angeles and Washington, the Japanese carrier was virtually unknown to travelers in the United States. Today, the airline is better known to U.S. business travelers, but it’s still unfamiliar to most Americans.

Thus, a major challenge for the carrier, known to Japanese business and leisure travelers as Zen Nikku, is to raise its visibility in the United States.

So look for the ANA logo at some high-profile events. It is one of four corporate sponsors of the Michelin Tennis Challenge being held at the Forum in Inglewood. Last month, ANA sponsored two concerts by the Los Angeles Chamber Orchestra. In June, it sponsored the “Heart of the City” downtown marathon in which 3,000 runners participated.

“Our major objective is how to implement and increase our corporate identity in the marketplace,” explained Koji Yamashita, regional manager of Western U.S. operations of ANA.

Plans More Routes

The carrier spent $5.1 million on advertising in its first year. Its advertising campaign, aimed entirely at the business traveler, focuses on its executive class service, which offers six seats across, contrasted with the typical eight- to nine-seat configurations.

ANA--the second Japanese commercial carrier (after Japan Air Lines) to begin flying between the United States and Japan--says it is operating at 74% capacity on its two U.S. routes. It hopes to add three new U.S. destinations during the next two years: San Francisco, New York and Honolulu. And it also is looking at building or buying a hotel in Los Angeles, New York or Washington.

On the Los Angeles-Tokyo nonstop route, ANA competes with Varig, United, Singapore, Northwest Orient, Japan Air Lines and Malaysia Airlines, according to Keisuke Inui, deputy president of ANA. He said through an interpreter that his carrier has a 13% market share on the route but also offers 13% of the seats.

In its first 15 months of service, ANA carried 200,000 passengers between Los Angeles and Tokyo and 100,000 between Washington and Tokyo. It expects to increase traffic on the two U.S. routes to 400,000 annually. About 20% of its passengers are Americans.

Founded in 1952, ANA is the world’s sixth-largest airline in number of passengers carried--it expects to carry an estimated 26 million in fiscal 1988. In Japan, it commands a 58.5% share of the market. Until March, 1986, when it initiated its first scheduled international service to Guam, ANA had flown only charter international flights. It now provides commercial scheduled service to Sydney, Australia, and Beijing and plans to expand in Europe.

In the fiscal year ended last March 31, ANA’s operating revenue totaled $2.58 billion and operating income $86 million.

Expanded U.S. service for ANA, however, depends on successful negotiations of a new U.S.-Japan bilateral agreement on aviation, which has been under informal discussions for the past six months. The two countries have long had differences over Japan’s desire to protect its market and U.S. demands to open it up.

Transpacific Traffic Rising

The transpacific market is one of the fastest-growing air transport markets in the world. Since 1979, according to a report by Montgomery Securities of San Francisco, airliner arrivals in the Pacific have grown at an average annual rate of 7% to 8%. That exceeds the 5% to 6% increase in North Atlantic arrivals and the 5% gain in domestic U.S. travel.

By 1994, transpacific air travel will account for a third of world passenger traffic, up from only 25% now, Montgomery Securities’ report said.

Major U.S. carriers have also been positioning themselves to cash in on the fast-growing market. United, for example, acquired Pan Am’s old Pacific routes in late 1985. Last year, American was given a Texas-to-Tokyo route, and Delta, an Atlanta-Tokyo route.

Japan, in particular, is an important market because it accounts for most of the transpacific air traffic. The 4.8 million Japanese passengers make up 24% of those passengers and also account for the largest percentage of business travelers to the United States.

“More than half of the passengers moving between the U.S. and the Pacific are traveling to and from Japan,” according to the report.