TOKYO - All Nippon Airways has come under criticism over a new three-tier domestic fare system introduced from May 19, with complaints over seat assignments and reports that some passengers booked on the cheapest fares were unable to board their scheduled flights, prompting ANA to consider changes as it seeks to improve the profitability of a domestic network where about 60% of routes are in the red.
The new system divides domestic economy fares into three categories: Flex, Standard and Simple. Flex is the most expensive, Standard occupies the middle range and Simple offers the lowest prices.
Passengers buying Flex or Standard fares can confirm their seats when they make their reservations, while those using Simple fares cannot finalize a seat assignment until online check-in opens 24 hours before departure.
The restriction has created particular difficulties for families hoping to sit together. Even when passengers try to select seats as soon as online check-in opens, adjacent seats may already be unavailable during busy travel periods such as the summer holidays.
Concerns intensified in early June after a number of passengers posted online that they had been unable to board flights they had booked using Simple fares.
Airlines commonly accept more reservations than the number of available seats because they expect some passengers to cancel on the day of departure, a practice known as overbooking.
Problems can also emerge when typhoons or other bad weather cause flight cancellations and passengers from canceled services are transferred to other flights. Those transfers can rapidly reduce the number of available seats before online check-in opens for passengers holding Simple tickets.
The issue was raised at ANA Holdings' shareholder meeting in June, where a shareholder asked whether passengers using Simple fares would be the first to be removed when there were not enough seats.
ANA President Juichi Hirasawa denied that would happen, saying the airline would "absolutely never" ask passengers to transfer to another flight solely because of the type of fare they purchased.
However, the controversy has left some travelers with the impression that choosing a cheaper ticket could expose them to greater inconvenience.
When overbooking occurs, airlines may seek volunteers willing to switch to another flight and offer compensation to passengers who cooperate. For travelers with fixed schedules after arrival, however, changing flights can still cause significant disruption.
ANA introduced the new fare structure partly because of deteriorating financial performance on its domestic operations. About 60% of ANA's domestic routes are currently loss-making.
The airline is seeking to make greater use of dynamic pricing, adjusting fares more flexibly according to demand and strengthening its ability to compete with low-cost carriers.
For example, when many seats remain unsold shortly before departure, ANA can make more seats available under the cheaper Simple category in an effort to fill the aircraft and improve its load factor rather than allowing seats to fly empty.
Another factor behind the change was ANA's decision to integrate the reservation and passenger service systems previously used separately for domestic and international flights.
The unified system is intended to make it easier for inbound travelers booking international journeys to reserve connecting domestic flights in Japan at the same time.
Following complaints about the difficulty of securing adjacent seats, particularly for parents traveling with children, ANA is now considering allowing Simple-fare passengers to reserve seats in advance for an additional fee.
The differences between the three fares can be substantial.
A comparison on ANA's website for a one-way Tokyo-Sapporo trip booked 28 days before departure, using the lowest available economy fares for travel starting by October 24, showed a Simple fare of 12,760 yen and a Standard fare of 16,390 yen, a difference of about 3,600 yen.
The Flex fare was considerably higher at 49,940 yen.
ANA has also faced criticism over planned changes to another service, its Super Flyers Card, a credit card associated with benefits for frequent flyers who qualify for elite status.
Cardholders who qualify can continue receiving benefits such as free access to airport lounges as long as they continue paying the card's annual fee, even if they later fly less frequently.
ANA proposed changing the eligibility requirements for some benefits from fiscal 2028, saying congestion at airport lounges had become a problem.
Under the proposal, cardholders would have been required to spend at least 3 million yen a year on the card to maintain access to certain benefits.
The proposal also drew strong criticism and ANA was forced to reconsider the plan.
Both controversies have highlighted the difficulty ANA faces as it attempts to improve profitability and manage increasingly crowded services without alienating frequent customers and longtime supporters of the airline.
Source: Kyodo
