AirAsia Japan stated (03-Feb-2012) it obtained an Air Operator's Certificate (AOC) from the Japanese Civil Aviation Bureau on 01-Feb-2012. The AOC will enable AirAsia Japan, a JV between AirAsia and All Nippon Airways, to launch commercial services to international and domestic destinations. The carrier expects to launch service in Aug-2012, stating: "The company targets this joint venture to begin operations at the latest Aug-2012 but could be earlier subject to aircraft availability". [more - original PR]
AirAsia Japan receives AOC; expects to launch service in Aug-2012
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Japan's expanding LCCs drive growth but need cultivating; Spring Airlines and AirAsia re-entry loom
The new wave of low-cost carriers in Japan are entering their third year of operations, with Peach Aviation passing the milestone in Mar-2014 and Jetstar Japan doing so in Jul-2014. Along with AirAsia Japan (launched in Aug-2012 and re-launched in Dec-2013 as Vanilla Air) and a number of preceding LCCs, they are not only delivering on Japan's objective to raise passenger figures but are seeing LCCs become a serious force in Japan. In the last nine months of 2013 LCCs carried 17% of passengers in Japan's domestic market while for the first three months of 2014 they offer 24% – nearly one quarter – of available seat capacity, according to OAG.
The three new LCCs – Peach, Jetstar and Vanilla – carried 6% of traffic. While depressed from the AirAsia/Vanilla switch, it marks a start for the first carriers to eliminate all frills, unlike predecessors such as Skymark, which alone carried 7% of traffic. The adoption to LCCs in Japan is slow, and there were some early painful lessons, but growth is near-guaranteed. Jetstar Japan added nearly as many seats as JAL while Peach added nearly as many seats as ANA. Meanwhile ANA and JAL project long-term decreases in Japan's domestic market. Further, Jun-2014 sees the launch of Spring Airlines Japan with domestic flights and in the future international services, mainly to China. This is the first (but will not be the last) international JV for China's Spring Airlines. AirAsia is also looking to re-enter. However, five new LCCs plus three existing mean excessive market fragmentation.
Although it may challenge the epithet that airlines never die in Japan, consolidation is in order. But more importantly, until prevailing legacy attitudes are redirected towards supporting economic expansion goals, LCCs will continue to labour under unnecessary handicaps.
Southeast Asia low-cost airline fleet to expand by almost 20% in 2014. Are more deferrals needed?
Southeast Asia’s low-cost carrier fleet is still projected to increase by nearly 20% in 2014 despite a recent spate of delivery deferrals and suspensions of expansion. The region’s LCC fleet also grew by about 20% in 2013, creating overcapacity in several Southeast Asian markets and leading to the current pressure on yields and load factors.
The AirAsia Group has made the right move in slowing down expansion by deferring deliveries and selling aircraft. Tigerair Mandala and Jetstar Asia also have decided to take at least a one-year hiatus from expanding their fleets. More Southeast Asian LCCs, including potentially the Lion Air Group, need to make similar adjustments for market conditions to improve.
Southeast Asia is still a market with huge opportunities for further LCC growth. But LCC capacity expansion has started to outstrip supply, perhaps necessitating a pause for breathing space.