Vanilla Air - Can this Japanese Low-Cost Carrier Differentiate Itself?

Vanilla Air - Can this Japanese Low-Cost Carrier Differentiate Itself?

AirAsia Japan, one of Japan's low-cost carriers (LCCs), in an effort to differentiate itself, yesterday announced that it will change its brand and company name to "Vanilla Air" in November.  

AirAsia Japan was jointly established in July 2011 by ANA and AirAsia (Malaysia) and started flying in August, 2012, but has struggled in competition with other full service and low-cost airlines.

So, with a company announcement that can only be filed in the "you can't make this stuff up" category, the company has made a bold step to show it has something different to offer by renaming itself, Vanilla Air.

To the question of the reason why they named it Vanilla Air, Tomonori Ishii, President of AirAsia Japan answered, "Vanilla is a food product very much familiar with the public. It is grown with great care and represents high quality."

But the obvious meaning of "vanilla" held in the west is not lost on many Japanese observers.  Some have wondered whether the rebranding shows there is more to offer or less to offer.  One Japanese blogger commented that if they wanted to make the airline named after something sweet, it should have been something with a little more flair like 'Manju Airlines'. (Manju is a Japanese sweet bean paste bun.)  

Another Japanese blogger had another observation: "I think 'Vanilla' will be hard for Japanese people to pronounce and some people may end up missing their flights."

In the competitive domestic market, Vanilla Air will be competing with Peach Aviation, one of the stronger LCCs in Japan.  It also has ANA as a parent and is based in Kansai International Airport (Osaka). It started regular service in March 2012.  They currently have service in 8 Japanese cities and 3 foreign cities. Observers say that one reason they have been doing well is that they focus on "Japanese style" polite and delicate service, while other LCCs offer the minimum necessary service to their passengers. For example, to give their passengers an enjoyable flight experience, Peach Aviation offers them a free content download service such as movies, games, magazines, etc. at the airport terminal and they create appetizing fee-based in-flight meals (some of them with a peach theme like peach ice-cream and peach danish).

It is unclear if Vanilla Air will offer any special theme-based service based on its new brand.

To date, AirAsia Japan has performed poorly in seat occupancy rates and has suffered from a perception gap between full-service ANA, the Japanese luxury airline, and AirAsia, the popular pan-Asia discount airline. AirAsia Japan announced in June 2013 that it will divest itself, and upon completion of this process, AirAsia Japan will change its name.

In the Japanese airline industry, it is said that 2012 was the first real year of the LCC. Some new Japanese LCCs that fly between Japanese cities were established in 2012 and they have been facing intense competition with their rival LCCs and the Japanese majors, Japan Airlines and ANA.  

Still a few years ago, most of the people in Japan didn't know the idea of LCC or low-cost airlines. The LCC boom started late and slowly in Japan compared with other counties. It started with Jetstar airlines (Australia) which began service between Tokyo and Cairns and Gold Cost in 2007 for the special price of ¥8,000. After that, several foreign airlines went into service in Japanese cities.

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