First Eastern Investment reportedly invested HKD461 million (USD59 million) for a 33% stake in a JV Japanese LCC, in which ANA will hold 39% (The Standard, 13-Sep-2010). First Eastern Chairman and CEO, Victor Chu, stated the Kansai-based LCC will offer between five and 10 domestic routes in its first year of operations (reportedly including Narita, Fukuoka and Naha), with the routes to be short-haul sectors of less than four hours with ticket prices 50% less than present market levels. Mr Chu added that the carrier is also seeking to attract international passengers, especially from China. "The Chinese will be a driving force [in both Japan and the region] as their travels abroad become more frequent," he said. He said the number of Chinese visitors to Japan has surged more than fourfold in two years, adding that there could could be up to 4 million Chinese visitors p/a after visa requirements are eased. Mr Chu added that the carrier would lease a number of aircraft and while not disclosing a proposed break-even timeline, he stated the size of the initial investment of JPY15 billion (USD179 million) "is definitely enough" for five years of developing the Japan domestic market (Financial Times, 11-Sep-2010). Meanwhile, ANA President, Shinichiro Ito, conceded that it "can't rule out the possibility that the low-cost carrier will eat into ANA's profits" (Yomiuri Shimbun, 11-Sep-2010).
ANA LCC to have initial investment of USD179m
You may also be interested in the following articles...
Ryanair: digital success raises ancillary target to 30% as it becomes the "Amazon of air travel"
Kenny Jacobs, Ryanair's Chief Marketing Officer, has said that its website aims to become the "Amazon of air travel". The airline that was built around selling seats on flights as cheaply as possible – and not much else – now wants to sell a much wider range of products and services. In Oct-2016 it launched its new accommodation service, Ryanair Rooms, and it plans Ryanair Holidays by next summer.
Now well into its third year, Ryanair's 'Always Getting Better' programme (abbreviated to 'AGB') has been a demonstrable success. Accompanied by a move to increase Ryanair's presence in primary airports, AGB has aimed to improve customer service and reinvigorate its digital interfaces. Since AGB was initiated in 2014 Ryanair's passenger numbers have returned to double-digit rates of growth, and load factor has gained more than 10ppts.
Onur Air: Turkey's number two LCC goes into reverse after German expansion stalls
Turkey's fifth largest airline by seat capacity, LCC Onur Air, has thrown its operation into reverse. After growing scheduled seat numbers at an average rate of 11% pa for four years, including growth at around 20% for most of 2016, it will cut capacity by 20% this winter.
A series of geopolitical events has weighed heavily on demand for air travel in Turkey, particularly in international travel. Weak trading conditions have also prompted the market leaders – national airline Turkish Airlines and LCC Pegasus – to halt their own rapid growth. Onur Air is bigger in the domestic market than it is in the international market, but much of its 2016 expansion was driven by international growth, particularly to Germany.
Onur's network faces strong competition on almost every route, particularly on international routes, and this has clearly posed a severe challenge in the face of falling demand.