All Nippon Airways (ANA) president Shinichiro Ito said the carrier is targeting annual sales of between JPY150 billion and JPY200 billion (USD1.8 billion and USD2.5 billion) in five years from its LCC subsidiaries launching in 2012, acccording the The Nikkei reports. AirAsia Japan "will add five or six planes to its fleet each year, bringing the total to 25-30 aircraft in fiscal 2016," Mr Ito noted, adding that while the LCCs will "take away some of ANA's customers, they will contribute to group earnings". Peach Aviation, meanwhile, launched operations on 01-Mar-2012. [more - CAPA Blog]
ANA expects LCC subsidiaries to achieve annual sales of USD1.8bn to USD2.5b in five years
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LCCs rapidly grow to account for 30% of Japan-Korea market. Full-service airlines need new strategy
In six years, low-cost carriers have carved out 30% of the Japan-Korea market, the world's 14th largest country-pair and fifth-largest in Asia. The overall market is growing, but with full-service carriers reducing capacity. 2015 is the third consecutive year of full-service capacity declines. Korea's independent LCC, Jeju Air, has captured 9% of the overall market. Korean carriers account for 85% of capacity, the result of their lower cost base compared to Japanese carriers and their ability to serve more Japanese points from one or two Korean hubs.
There are dual-brand strategies in the market that have seen full-service airlines hand routes to their LCC, fly alongside their LCCs, or have the LCC launch entirely new services. Overall, however, the strategies are hardly thoroughly integrated. Asiana intends to make Japan a large focus of its proposed LCC Air Seoul, which would finally give it a LCC presence in Korea's largest market (Asiana's existing LCC Air Busan is in Busan and does not fly internationally from Seoul). But a series of safety incidents have delayed Air Seoul, creating an opportunity for competitors to step up their competitive growth – if they can seize the moment.
Skymark Airlines could be a Delta target as Airbus & Intrepid oppose an ANA-led restructure
It was not Japanese aviation's proudest day when All Nippon Airways was selected to sponsor the re-rehabilitation of bankrupt Skymark Airlines, the country's third-largest airline. Putting Skymark under the wing of ANA thereby returned air transport to an ANA-JAL duopoly that the Japanese government has for years worked in vain, and perhaps unenthusastically, to prevent.
Now foreign forces may reverse the situation in a challenge to Tokyo's preferred political outcome. Airbus and lessor Intrepid represent the majority of Skymark's debt, allowing them considerable weight over Skymark's restructuring plan – if a Tokyo court, undoubtedly under political pressure, gives airtime to non-Japanese concerns. At the centre of the dispute are Skymark's discarded A330 and A380s that are customised and difficult to place with other airlines. It appears Airbus and Intrepid expected ANA to offer a satisfactory solution for the aircraft but now there is none.
Airbus and Intrepid may prefer Skymark to restructure with the help of a different airline that will remedy the A330/A380 situation. Skymark has been shopped around to most of the world's airlines; China's HNA put in an offer; Delta could be a candidate, still lacking a Japan solution. A Skymark independent of ANA is in Japan's interest, if the country can accept a foreign airline as its partner.