Link Airs announced (12-Jul-2013) it has applied with Japan MLIT for its air operator’s certificate. The start-up plans to commence operations from spring 2014, operating with two ATR 72-600 aircraft initially on services from Fukuoka and Kitakyushu including five times daily Fukuoka-Miyazaki, three times daily Fukuoka-Matsuyama and twice daily Kitakyushu-Matsuyama services. The carrier expects to take delivery of its third ATR aircraft one month after its inaugural operation, with plans to use the additional aircraft to increase Fukuoka-Miyazaki frequency and launch Kitakyushu-Miyazaki service. [more - original PR - Japanese]
Link Airs applies for AOC, launch in spring 2014 from Kitakyushu and Fukuoka
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Japan's StarFlyer, struggling to expand its niche, will reduce its fleet and receive new management
One of Japan's smaller carriers, StarFlyer is finding that being boutique does not imply versatility. The carrier in just a year has swung from slight profits to a negative 10% operating margin, spearheading the resignation of its president and cutting the all-A320 fleet from 11 to nine. Weighing the carrier down, besides foreign exchange, was a drastically unsuccessful foray into the international market with a Kitakyushu-Busan service that linked two secondary cities with limited demand and too high a cost base to stimulate demand.
StarFlyer has strengths. It retains the fourth-largest slot pool at Tokyo Haneda and sees healthy codeshare bookings from All Nippon Airways, which also owns part of the carrier, a measure likely to support ANA's position relative to rival Japan Airlines. It is possible to address past performance, and a restructuring plan intends to do so. But the future will pose further challenges. Shorter routes are being impacted by LCCs, and StarFlyer has ended Fukuoka-Osaka Kansai services. Skymark's forthcoming all-premium A330 service will deliver better comfort at lower prices, which it can sustain with a cost base half that of StarFlyer and ANA. That low cost base is the critical ingredient giving Skymark expansion opportunities. The restricted nature of Haneda grants security and, likely, a future for StarFlyer. But expansion opportunities also look restricted, possibly confining StarFlyer to its niche and ultimately see the carrier lose relevance.
North Pacific airline route development: Part 1 - Market growth and the Asian airlines' strategies
The North Pacific market has expanded well above global averages over the past five years and looks set to continue to expand rapidly. There are great differences in the performances of Asian and North American airlines, just as regulatory variances between their respective governments influence growth rates.
Today round two in the battle for the trans-Pacific market has begun. In the last decade ultra-long-haul non-stops by Thai Airways and Singapore Airlines, were introduced – and each withdrawn recently. Meanwhile, more northerly-based Cathay Pacific's non-stops to east coast North America have grown strongly. Hub power has been a core value; Bangkok and Singapore were geographically disadvantaged (fuel-inefficient aircraft did not help the cause). Kuala Lumpur, whose Malaysia Airlines did not have non-stops, was a smaller and less effective hub that caused MAS ultimately to withdraw one-stop Los Angeles and New York service.
Over the past decade the trans-Pacific duelling was among North and Southeast Asian airlines, as their North American airline peers remained preoccupied with bankruptcy, followed by consolidation. Now, with airlines on both sides of the Pacific contesting the market, the new fight for trans-Pacific markets is among the regions: Seoul versus Hong Kong, Seattle versus San Francisco. Renewed and reconfigured fleets are enabling expansion, supported by economic growth, changed visa rules, and, in the case of the US (but not the more restrictive Canada), liberal and often open skies air service agreements.
The market fundamentals are the same, but airline drives to expand have varied: for Japanese and Taiwanese carriers, new opportunities; for Asiana, Chinese and US carriers, to catch up; and for Cathay, to defend its already stronger position.
Rapid expansion will continue to impact yields and profits negatively, but airlines will remain focused on the long term. Growth will continue and as it does partnerships will grow deeper. There is still much upside potential, but in the meantime the marketplace will be competitive and challenging.