格安航空参入 本格化する「空」の価格競争

The Yomiuri Shimbun (Oct. 19, 2010)
Low-cost carriers will ignite airfare war
格安航空参入 本格化する「空」の価格競争(10月18日付・読売社説)

Foreign low-cost carriers (LCCs) are lining up to enter the Japanese market. They are catching the eyes of customers by offering ultralow fares--for example, 5,000 yen for Haneda-Kuala Lumpur flights and 4,000 yen on the Ibaraki-Shanghai route.

Airfares in Japan are said to be the highest in the world. Intensified price competition will be ringing alarm bells at major domestic airlines, which have provided service to passengers calculated on the premise of charging high airfares.

The advance into Japan by these carriers is expected to stimulate demand for air travel among passengers--especially young people--who are sensitive to fares, thereby attracting visitors from Asia and elsewhere. We hope these carriers' full entry into the Japanese market will help revitalize the national economy.

LCCs now fly about 40 percent of all passengers in the United States and Europe and nearly 20 percent in Asia. Their trademark management strategy is to offer rock-bottom airfares by slashing operating costs.


Cost-cutting efforts

These airlines keep a lid on maintenance costs by using a limited number of aircraft models and maximizing flight numbers by shuttling between destinations with a short turnaround time. They crimp on personnel costs by making cabin crew clean the aircraft. Seats are squeezed close together and passengers must pay for in-flight meals and movies.

Australia's Jetstar Airways, South Korea's Jeju Air and China's Spring Airlines are already here, and Malaysia's AirAsia--the largest low-cost carrier in Asia--will start operating in Japan in December. This is expected to crank up competition among LCCs.

Regular international flights will resume at Haneda Airport late this month for the first time in 32 years with the completion of a new runway. The number of departure and arrival slots at Haneda and Narita airports will expand to 750,000 a year--1.5 times the current figure--in three to four years.

The planned increase in slots will have the LCCs rubbing their hands with glee. Their entry into Japan had been hampered by the restricted number of available slots.

To counter the arrival of foreign LCCs, All Nippon Airways will establish Japan's first full-scale LCC this year and start service next fiscal year. Japan Airlines, which is struggling to reconstruct itself after filing for court-administered bankruptcy early this year, also is contemplating launching an LCC.


Change concept

Some observers have suggested the Japanese LCCs will steal passengers away from their parent airlines. But domestic airlines will fall behind foreign LCCs in attracting Asian passengers and also lose Japanese passengers to them if they sit idly by. ANA and JAL must overhaul their deep-seated, high-cost management mind-set and promote their low-cost business in earnest.

LLCs have not found a foothold in the Japanese market because this nation's civil aviation policy paid more heed to the intentions of domestic airlines sticking with high fares than to passengers.

We think the government should reinforce its policy support of LCCs as this will enhance the international competitiveness of domestic airlines and promote Japan as a tourism-oriented country.

The government must consider lowering the expensive landing fees that have rankled foreign airlines, build terminals exclusively for LCCs and deregulate the fare system so fares can be set flexibly. Needless to say, the industry must be closely supervised to ensure that passenger safety is never compromised.

(From The Yomiuri Shimbun, Oct. 18, 2010)
(2010年10月18日01時28分 読売新聞)

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