China's Foreign Exchange Trading System stated the value of the yuan reached a new high against the US dollar on 11-Oct-2010, reaching 6.6732 per USD (Xinhua, 11-Oct-2010). Meanwhile, the USD reached a new 15-year low against the Japanese yen, falling to as low as JPY81.37 before recovering to JPY82.07 (BBC News, 11-Oct-2010). The record low for the US dollar against the yen is JPY79.75, reached in Apr-1995.
Yuan reaches new high against the USD
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China-Japan: Peach, Jetstar Japan & China United the latest LCCs to enter Asia's 3rd largest market
Japan-China is the third largest international country pair in Northeast and Southeast Asia. The market has expanded due to Chinese outbound visitor growth, with Chinese visitor numbers doubling from 2.4 million in 2014 to 5.0 million in 2015, and 9M2016 shows a further 30% expansion. LCCs account for approximately 10% of the market, and there are an expected three further LCC entrants in the Japan-China market: Peach Aviation, Jetstar Japan and China United Airlines. Their entry, however, comes after the major boom: eight airlines have entered the market since 2014.
The impact of the additional LCCs will be minimal in network size: Peach's four weekly Osaka-Shanghai flights are in addition to an existing 117 weekly flights. Over the long term there are strong opportunities for LCCs (as evidenced by the first mover Spring Airlines), but in the near future the greatest impact from additional LCCs will be in reminding Chinese full service airlines of alternative business models and their own need to reform. To a Chinese airline a Japanese LCC is almost paradoxical: an airline trying to be low cost in a high cost country with low population growth. Yet the relative success of Japanese LCCs provides a case study – and also market challenges.
Where the A380 flies: Japan and intra-Asia routes decline while Australia & Middle East grow
The A380 is once again under media scrutiny, despite there being no major movement on the type. Comments from Air France and Qantas about not taking further A380s have long been assumed, and it has been apparent that Malaysia Airlines does not even have the need for its A380s. Singapore Airlines not renewing the lease on its first A380 is hardly surprising, and offers no definitive conclusion about the A380 or second-hand market; early A380s had different production and are not as efficient as later models. The lack of movement on the A380neo continues to irk the model's largest customer by far, Emirates, and may not make for a productive relationship as Emirates weighs an A350 or 787 order.
For most, the A380 continues to fly. How and where it flies is changing. Flights to and from the Middle East are becoming more common as Gulf airlines, and mostly Emirates, take delivery of A380s. A further shift to the Middle East is inevitable. In Japan there has been a near exodus of A380s; airlines dropping the type as they moved from Narita to Haneda, which cannot accommodate the A380 during the day, and Singapore Airlines down-gauging. Intra-Asia flying is decreasing – notable given the growth of A380s based in the region. Services by the A380 to Australia are growing, perhaps as it becomes an easy market for airlines to redeploy capacity amid European security concerns and trans-Pacific overcapacity.