Japan MLITT notes economic benefits of LCC entry to local economies

Japan MLITT released (28-Apr-2015) a research report on the economic effects of LCCs on regional destinations. Highlights of the report are as follows:

• Entry of LCCs in low demand local routes is expected to simulate demand:
• • At the end of 2014, LCCs operated 2204 local services per month, accounting for 43% of total LCC services;
  • Of the 69 routes that full service carriers withdrew from in 2000s, six of the routes were restored by LCCs;
  • Price difference between LCCs and FSCs is larger on local routes than on major routes;
• Survey results of LCC passengers at three airports (Sapporo Chitose, Matsuyama and Oita airports):
• • LCCs had a large portion of inbound tourists to the regions compared to FSCs;
  • New demand stemming from LCCs is small across the airports, between 16.2%-18%;
  • Travel spend per capital from new passengers as a result of LCCs is less than FSC converted passengers;
• Economic ripple effect of LCC entry into three airports (Sapporo Chitose, Matsuyama and Oita airports):
• • Significant economic effect has occurred from new demand that is created by LCCs;
  • Sapporo Chitose Airport: LCC entry has brought JPY7000 million (USD70 million) in economic benefit to Hokkaido p/a;
  • Matsuyama Airport: LCC entry has brought JPY770 million (USD7.7 million) in economic benefit to Ehime Prefecture p/a;
  • Oita Airport: LCC entry has brought JPY960 million (USD9.6 million) in economic benefit to Oita Prefecture p/a. [more - original PR - Japanese]