Regional airlines Air Do and Solaseed Air merged their operations Monday to cut costs and effectively utilize resources amid a slump in travel demand caused by the coronavirus pandemic.
Air Do, headquartered in Sapporo, and Solaseed Air, based in Miyazaki, will retain their names and current routes under a new holding company, RegionalPlus Wings.
With the merger, the struggling airlines aim to reduce costs through the joint maintenance of aircraft and procurement of supplies, they said.
"We will survive the new business environment and provide our customers with more comfortable air travel," Air Do President Susumu Kusano, who also assumes the role of chairman at the holding company, said at a ceremony held at Tokyo's Haneda airport.
Solaseed President Kosuke Takahashi, who was appointed as president of the holding company, said the two airlines will push ahead with improving operations such as customer data sharing to boost sales.
A severe business environment with higher fuel costs exacerbated by a weaker yen is pushing Japan's airline industry to seek joint operations to cut costs.
The county's two biggest airlines, ANA Holdings and Japan Airlines, have said they will start code-sharing flights with three regional airlines in Kyushu later this month.
Transport minister Tetsuo Saito welcomed the latest move, telling reporters "I hope it will help maintain and further improve their airline services."
The two companies announced the merger plan in May 2021 as their operations were being hit by shrinking demand amid the pandemic.
Air Do and Solaseed suffered net losses in the business year ended March for the second straight year as the number of passengers fell due to COVID-19 restrictions and strict border controls imposed by the government.