Across the Aisle From ANA’s Americas Strategy Boss On New US Destinations, A380s, and More

Hopefully you’ve enjoyed reading my Across the Aisle interviews from the Boyd Conference earlier this month (Virgin America and Air Canada). We’re now down to the final one. I had the chance to speak with Tadashi Matsushita, Vice President of Strategic Planning, The Americas for ANA about his airline’s brand, the chance of seeing ANA A380s in the US, and much more.

I first met Tadashi when he was in government affairs for the airline. But for the last couple of years, he’s been running the strategy group for the Americas, a key market for the airline. We sat down to talk about topics ranging from the airline’s brand to its 787 plans and yes, even the A380.

Brett: Since the last time we spoke, I’ve finally flown ANA.

Tadashi: Oh you did?

Brett: Yes, I flew San Jose to Narita in business, and it was a fantastic experience. What is the most fascinating thing to me, of course, is that it’s from San Jose. You have the ability to put the 787 in a lot of places. And you have a lot of 787s now.

Tadashi: Yes, we have 41, but we’ll have a total of 83. Most so far, about 35, are 787-8 with the rest 787-9.

Brett: How is San Jose doing?

Tadashi: It’s doing pretty well. We have a load factor of a little over 80%.

Brett: But how are the fares?

Tadashi: Fares are pretty good as well. You know the region, all the IT giants there. Before, they thought San Francisco was the only gateway. We have the joint venture with United, and they have relationships with all the IT giants, so that helped us a lot, but it’s been our own effort as well. Many people prefer our service now.

Brett: Does it take people away who were going to fly you or United from San Francisco anyway or does it take from, say, JAL?

Tadashi. Maybe JAL? *laughs* Our San Francisco flight is full. The load factor, we fly the 777-300, is probably on average 85 percent. It’s one of the highest load factor flights. So the San Jose flight didn’t take any customers from the San Francisco side. We just saw an increase.

Brett: Is San Jose something that only works because of the 787?

Tadashi: I think the 787 was the right aircraft size. And eventually I don’t know. If the market grows, we have an option of upgrading. Of course, we have a lot of 777s as well. But I think the 787 was the right aircraft when we launched and for the time being, yes. In the past 3 years, if there’s anything ANA has learned, it’s that new aircraft technology can completely change the game. San Jose is a good example of that.

Brett: You have, I guess, 40 more coming. So are we going to see more of those in the US on some new routes?

Tadashi: Yeah, I think so. We are both increasing our frequencies and also identifying new gateways to North America after Houston. Houston was our 10th gateway. Our growth strategy relies on the US to Asia market. As we see opportunities in secondary markets, the 787 will be the right aircraft.

Brett: That’s what I’m interested in seeing. Certainly you and JAL, with San Diego and Boston, have been progressive on that. Are we going to see new markets soon? I mean, I know you’re not going to tell me where… *laughs*

Tadashi: *laughs* What I can tell is we are constantly watching the market, seriously, actually [to determine] where we can have our next gateway. The cities you’ve mentioned are within our radar. I mean if you see MIDT data, you’ll know which cities have the lucrative premium customers.

Brett: How much does United’s presence in a city make a difference? For example, if anyone is looking at Phoenix, I assume it’s JAL because of the connection with American. Is that really important?

Tadashi: Yeah, it’s definitely the key for us. Houston for example, we have a great partner in United to Latin America. We have great connectivity and that’s actually very important these days.

Brett: Talk to me a little about Haneda, US to Haneda. How does Los Angeles do for you to Haneda?

Tadashi: The Haneda route is doing very well from Los Angeles.

Brett: Is it more Japanese origin?

Tadashi: Yeah, yeah. But we do have a good connection to Asia as well. We have the largest [number of] destinations from Haneda.

Brett: Are you in favor of liberalizing further in Haneda?

Tadashi: Yeah, we would like to see Haneda allocate more slots to international flights. But we also have to be practical. We know that there’s a limit as to how much the government can expand the slots.

Brett: Of course, they could remove the time limits.

Tadashi: Yeah, and if they could get an agreement from the municipal government of Tokyo. Currently the aircraft can not fly over Tokyo prefecture, and there are several other obstacles there.

Brett: You have a problem at Narita as well.

Tadashi: Yeah, Narita as well. It’s brutal when you think about all the competition going on in terms of hub competition, it’s very hard. We can’t choose the hub. We’re stuck in Tokyo. But I’m pretty confident that leading up to 2020, at least the Japanese government is saying that they will be expanding slots at Haneda. So we’re hopeful.

Brett: Now, are we going to see some Skymark A380s flying into the US soon?

Tadashi: *laughs* Um, I don’t think so.

Brett: Are we going to see the A380s operated by ANA? Is that not official yet?

Tadashi: First of all, for the Skymark deal, it’s true that Airbus supported us as a creditor, our plan. But I think it was a rational move for Airbus because all the creditors knew that that speed was a key. They were losing lots of money. Also, the plan had to be viable and practically thinking, most of the creditors knew that if they chose the other one, it was gonna take time. And [they might] ending up getting nothing from Skymark. So there was a rationale behind it.

For us and for the Airbus point of view, we made it clear that growth comes from our international operations, and we will grow the international business for the next decade or so. And Airbus knew that keeping a good relationship with ANA could eventually lead up to something for their interest. But the selection of aircraft as you know, it’s about economic rationality, the timing, financial positions we have, and also our midterm and long term plans. It depends on all those things.

Brett: Are you officially taking some A380s or is that part of the discussion?

Tadashi: We haven’t actually decided anything on that.

Brett: Do you see a place for them in the US?

Tadashi: *pauses* It’s a big aircraft. So, I mean, first of all I have no information about this matter. But I do oversee the strategic mid-term/long-term strategy planning in North America. It’s, it’s a challenge. It’s hard to imagine having such a big aircraft to some places. Yes we have a high load factor, mainly on the West Coast, but that doesn’t necessarily…

Brett: It’s a lot more seats.

Tadashi: Yeah, it’s a lot more seats. I think headquarters will eventually rationalize, but so far I have no information about having a deal with Airbus.

Brett: I have a brand question for you. I know there’s been a lot of talk about whether ANA is enough of a brand in the US, whether it should change. What are your thoughts?

Tadashi: I fully agree. There’s not a brand out there. That’s our struggle. It’s one of the major tasks and responsibilities I have. We’ve done some co-branding, like the golf event [ANA Inspiration in Rancho Mirage] and Star Wars…

Brett: Which, by the way, those are fantastic-looking airplanes.

Tadashi: Yeah, so we’re doing everything we can. We came up with a “by design” concept reflecting how we care about everything, even small things. It reflects our corporate culture. We’re pushing the “by design” concept. We’re trying to make our best effort, but it takes time. Yes, we can throw money into a market doing advertising like some of the gulf carriers. Although we don’t have big pockets like them. But the other part is we have to try to be assimilated into society or otherwise the business will never be sustainable.

Brett: How so?

Tadashi: Creating a win-win situation for the communities we fly in to, the areas we focus in our strategy. Sponsoring an event is part of that effort. And of course, through the relationship, it allows us to get to know people in the region. And they will be our ambassadors. They will create a buzz, and eventually our brand will be seen more in the market.

Brett: Do you think the name needs to change?

Tadashi: We have an advisory panel in Japan and I launched one in the States. We get the US perspective. Some people say ANA should take advantage of the Japan brand.

Brett: “ANA Japan”

Tadashi: Yeah. But Japan doesn’t exist in our brand name.

Brett: Well it does, just not in English.

Tadashi: Yes, Nippon. But we have a tagline “inspiration of Japan” – that’s the reason we created that tag line. But personally, I think we should keep ANA. It’s our heritage. The brand is the brand, but then what can we do with that? I don’t feel the necessity of putting Japan in the name.

Thanks to Tadashi for sitting down with me. Now I just can’t wait to see that R2-D2 plane in person…