All Nippon Airways Co. may delay the start of a discount carrier it planned to begin as early as this month, as overseas travel demand drops at the fastest rate in more than five years.
Japan's second-largest air carrier is waiting for "the appropriate moment to make a decision" as the world economy declines and tight credit markets make raising funds difficult, Junichiro Miyagawa, a director of corporate planning at ANA, said Wednesday.
The airline is forecasting a loss this year as passenger traffic tumbles amid the first simultaneous postwar recessions in Japan, the United States and Europe. ANA opened an office in Hong Kong in April to study options for the budget carrier.
"We will keep developments on our radar screen," said Miyagawa. "We are continuing to examine all options until the way becomes clearer."
ANA planned to create the new carrier before Tokyo's Haneda airport opens a fourth runway next year and increases the number of flights from domestic and foreign carriers it can handle.
The airline has added routes to Hong Kong, Shanghai and India as it expands its international service, currently less than half the size of bigger domestic rival Japan Airlines Corp.
ANA is slashing its overseas service next business year.
The carrier will cut 9 percent of international flights, mostly service to China, as the recession dampens demand. ANA will also lower frequencies on 10 domestic routes to trim flights within Japan by about 5 percent in the year starting April 1.
The company had 18 percent fewer international passengers in December.