CEO Interview

It's no fun to do the same thing that other companies are doing. For me, justice means offering new values that others aren't offering.

Shinichi Inoue, Peach Aviation CEO

  • Where exactly are the values of Peach’s existence?
  • What are the things that Peach values?
  • Please tell us about Peach's future prospects.
  • Who are the types of people that Peach is looking for?

Making the people of Japan and Asia happy and vibrant by offering new values.

The reasonable fares make it possible for a father who lives alone in Sapporo for his work to return to his home in Osaka every week.
It's possible to travel leisurely from Kagoshima to Osaka to see your grandchildren.
It's possible to go on a day trip to Taiwan with a pal this coming Saturday to enjoy the gourmet delights.
It's possible to follow a favorite idol pop star on a nationwide tour.

Going where you want to go whenever you feel like it. Hitting the road on a whim to see whomever you'd like to see.
Peach is making it possible to enjoy that kind of a new lifestyle which no one had ever imagined before.

Whether it's going back to your hometown, traveling someplace new, or going to a concert?the greater the number of these occasions, the more smiles you're bound to see; the more happiness that will be created. What used to be one such occasion increasing to three or five?that's literally tripling or quintupling the happy energy that's produced. The greater the number of these occasions becomes, the happier, the more energetic people are going to be.
It should enable more face-to-face communication, move people, start to connect an array of different things, and those ties will generate more links. As a result, the economy will be stimulated, and society should start to become more energized.
Interesting journeys will energize people, and they'll also energize society.

I think the impressions and joys that are born from connections between people, the feeling of excitement, and the smiles?these are sure to bring people happiness. It's what we call a "love of humanity" at Peach.
What we're aiming to become is an airline that nurtures a "love for humanity" through these types of fun activities.
Our dream is to create various customer values through ongoing efforts for innovation and to continue to spread energy and happiness to everyone who's involved in some way with Peach.

Safe operation is our absolute value. And at the same time, what's also important to us is to continue to create new customer value through innovation.

Safety first. It's an absolute prerequisite for an airline, and what comes before everything else at Peach. Still, that alone will not lead to major differentiation from other airline companies. We need clear differentiation from others in order to have many customers choose and fly Peach. To do that, we developed a low cost model?something that hadn't existed in Japan?and realized value as a "model train that flies the skies". A comprehensive sense of cost awareness is indispensible for a "model train that flies ". From major issues like the procurement of aircraft, building properties, and facilities to smaller items such as single sheets of copied documents and temperature settings for air conditioners, we make efforts for cost management and think about each yen that's spent.

What we would like to embrace on top of that is "love". For example, when we open a new route, it's a given that we make our decisions based on things like economic rationality and market potential. What we also value in addition is the perspective of how Peach will be able to contribute to that area, that city or town.

What I realized after actually starting Peach's operations is that people's movements will suddenly become active. Many people will visit a destination, which then invigorates the economy. A good example of that is Kansai Airport, Peach's main base which has regained energy.
Though it's true that people used to say a lot of things before we opened our services, like "Operating an airline at Kansai is a reckless thing to do."
The opening of our routes to Tohoku and Okinawa are based on the same idea. We make these choices also considering the viewpoint of what social contributions it's possible for us to make. The Sendai route has now become one of our routes that boast an extremely high rate of seat occupancy. I have a real sense that our position to pursue love for humanity and love for the region is supporting our growth.
It isn't possible to nurture that kind of love if we're bound by the things that the air transport business has considered as common sense up to now.
Because we're creating values that have never before existed, it's necessary to think about what we can do for our customers through methods that haven't been used in the past and then to make it happen.

For that purpose, Peach encourages its employees to make challenges and mistakes, as long as it doesn't concern safety. A mistake that occurs as a result of a challenge has value. Rather, I'm more concerned about the crime of not doing anything. Before starting the Peach operation, I received words from Professor Seiichiro Yonekura at the Hitotsubashi University Institute of Innovation Research, which continue to be my driving force: "A copy of existing models is not interesting, and it doesn't offer a chance to win in business, either. Innovation involves digging up potential demand and creating new movements. Peach should be particular about innovation and aim to capture potential demand."
Since the 1950s, fans were replaced by electric fans, night trains were replaced by the Shinkansen bullet train, picture storytelling was replaced by TV, and eventually, these advances led to the reduced emission CVCC engine and the Sony Walkman, which created a new global market. This Showa era was a period where innovation was happening everywhere. The GDP soared over the course of a decade, and society was full of energy and vitality. I believe that innovation had been the reason for that. Society is invigorated when innovation becomes visualized and is penetrated into our daily lives. That's why I would like to be particular about innovation in order to energize Japan. I believe that innovation is indispensible for sustainable growth.

It's also been unforgettable experiences receiving advice from Professor Yonekura and Patrick Murphy, the former chairman of RYANAIR who created the biggest LCC in the world, about these same attitudes. It goes, "speak in the first person", and if something doesn't go well, it's all your own fault, and you can only do everything yourself. This isn't just for myself, I also tell our employees about it, saying, "I'll go ahead and do that if you aren't going to get right on it."

We’re serious about aiming to become the world’s number one LCC.

When we're talking about the world's number one LCC today, that would be RYANAIR. It has more than 60 hubs, mainly in Europe, and it operates more than 300 aircraft and transports more than eighty million passengers yearly. It's Peach's final goal to go beyond this. You may wonder what an emerging LCC with only two hubs in Kansai Airport and Okinawa and 13 aircraft is talking about, but please think about it. The population in the European countries where RYANAIR operates is more than two billion, out of which the airline transports eighty million. As for Asia, where we operate, as far as population goes, it's more than two billion. Just by transporting a tenth of that population means serving 200 million. That's suddenly world number one.

Of course that's speaking about our final objective. There are still a lot of issues that have to be addressed so we can achieve that top position. One of them is improving the quality of our operations. I'm glad to say that in 2013, Peach posted a 99.6 percent flight completion rate. RYANAIR also had 99.6 percent. But they operate more than 300 aircraft, so this difference is very huge. To improve our flight completion rate to the extreme, with safety as an absolute prerequisite, the key point is just how we can penetrate our objective, to seriously aiming to become the top LCC in the world, among our employees. Boosting our flight completion rate on the precondition of safe operation will lead to trust from our customers, that Peach's flight operation is dependable. This is a major asset against our competitors, so I would like to be particularly partial about this.

And the next issue that follows is differentiation, and how clearly we can promote how different we are from other companies. Peach opened its services with the brand message, "Cute & Cool" in the first place, and it has been distinguished from other airlines through its collaborations with Rune, the originator of "Kawaii", and the "Girls Award", the largest music and fashion event in Japan. We've gathered attention with our check-in machines, which take a minimum of five seconds to complete, as well as our provision of in-flight entertainment services, where we don't have monitor screens but we do have content. I believe that we should continue to make various challenges and develop the characteristics that are suitable for Peach so our customers will want to fly on our aircraft because they're Peach.

Become a Peach person.

That's what I often say to our employees, "become a Peach person". There are three necessary elements for becoming a Peach person.

The first is to become particular about safety and on-time operation in the first person. The second is to feel the greatest pleasure in creating new customer values and to maintain a passion for making challenges. And the third is to be considerate of colleagues, including co-workers and people at partner companies. These are our three elements.

For the first element, I'd like our people to be particular about protecting Peach's safety and on-time operation, no matter which department they may work in. As long as they work at Peach, I'd like everyone, regardless of which part of the organization they're with?whether they're with personal affairs, finance, sales, or other areas?to talk about safety and on-time operation in the first person and find something that they can do for it each day.

The second element that's necessary is innovation and passion. I want everyone to enjoy, more than anything, creating new values that haven't existed before in order to bring joy to our customers. I also often think about what we can do for our customers when I'm relaxing at home on my days off. I'd be smiling to myself pondering how wonderful it would be if we could make a particular something a reality, and what a major feat it would be, and I wouldn't want someone else to beat us to it. I would be thinking that we're the ones who are going to do it, whatever it may take. Then I would vow to take the necessary actions to get those results no matter what obstacles there may be and no matter how tough the road ahead might be. And I would be sure to achieve results. I would like people who have this type of professional awareness to join us at Peach.

And finally, the third element is kindness toward the people we work with. I would like our staff to act in such a way that the people we do business with and others who are relevant, not to mention colleagues, superiors, and subordinates, can gain a sense of joy from working with Peach. Whether it's within or outside the company, I would like our people to have consideration for others, as part of a team that shares the same objectives. Naturally, there are limits to the cash that can be provided, and they might not be ample. But more than anything, we should pay back others with Peach's values. Making the people who are involved with Peach happy in this way?that's one form of the love that we talk about at Peach.

Peach is a company that tries to bring energy, excitement, and love to society with innovations that never stop being generated. It isn't a company that attempts to go on within the existing frameworks of efficiency. Because of that, I think it would be tough for a person who wants to aim for business efficiency alone. We're looking for people on whom our three elements resonate, people who have the ideas and the ambition to do something interesting.

When those types of people become active and our company grows larger, I'm hoping to return those profits to our employees as much as possible. Our office building will be so-so, whereas the employees are enriched. I think a company like that would be interesting. The going might be tough until we reach that stage, but we'd like to welcome anyone who's interested in joining us to enjoy that process.

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