- CAPA Analysis
- Schedule Analysis
- Route Maps
- US Route Data
- Annual Reports
- Print Summary
Peach is a Japanese low-cost carrier based at Osaka Kansai Interantional Airport. Peach commenced operations in Mar-2012 with a fleet of 180-seat A320s. The airline, founded in Feb-2011, is a joint venture between All Nippon Airways, Innovation Network Corporation of Japan and First Eastern Investment Group.
Location of Peach main hub (Osaka Kansai International Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Peach fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
309 total articles
30 total articles
The low-cost carrier focus in Hong Kong is firmly on Jetstar Hong Kong's effort to secure a licence, but much more quietly Hong Kong Express is preparing to re-launch as a LCC on 27-Oct-2013. Hong Kong Express will become Hong Kong's first LCC, and nearly two years after Hong Kong Express first mooted adopting the LCC model.
Its initial network will comprise mainland Chinese as well as Northeast and Southeast Asian destinations, a medley of new cities, previously served ones and actively served ones. Competition will range from light to heavy as it faces formidable full-service and low-cost carriers. Hong Kong Express plans to fly 1.5 million passengers in its first year and have a fleet of 30 A320s by 2018.
Hong Kong Express is clearly not an AirAsia or Jetstar. Its ancillary offering is light and other structural differences, like IT, will make it less robust. This is partially to be expected as it does not have an experienced LCC group to piggyback on, but its launch has hints of being under-whelming compared to what Peach or Scoot achieved.
Jetstar Japan has secured its position as the largest of the low-cost carriers that launched in Japan in 2012. But this size has come at a price. Jetstar Japan perhaps under-estimated the limitations posed by its home base Tokyo Narita's curfew.
While Jetstar Japan's punctuality has been in line with global averages, Japanese legacy carriers have created expectations in the market with extraordinarily high on-time performance and low cancellation rates. While that makes ANA and JAL super reliable, it also inflates their cost base. But the market, in an all too typical tale, has demanded the the same reliability but with the lower fares. Another growing pain was issues over safety procedures, leading it to voluntarily put a hold on growth.
But now Jetstar Japan has adjusted to its market and is looking forward, as CEO Miyuki Suzuki told CAPA's recent LCCs and New Age Airlines Summit in Seoul. An Osaka Kansai base and international operations have been put on hold. Jetstar Japan has been handed a considerable opportunity by the situation at AirAsia Japan, also based at Narita. AirAsia Japan will suspend operations in Nov-2013 and re-launch in Dec-2013 as Vanilla Air, bringing to ANA not just a new name but new strategy as Vanilla, like half-sister Peach Aviation, places more emphasis on international flights than on domestic. That leaves the new LCC domestic market to Jetstar Japan. Its next competitor, Skymark, will be distracted in 2014 as it takes A330s and A380s, moving away from being an LCC to more of a hybrid operation.
Vanilla Air will become the new name of AirAsia Japan from 01-Nov-2013. The re-branding exercise follows the Jun-2013 dissolution of the joint-venture between AirAsia and All Nippon Airways that established AirAsia Japan, which commenced flying on 01-Aug-2012. ANA has taken over AirAsia's 49% stake to have complete control and will guide Vanilla Air with 100% management control on its re-launch, ANA's first time establishing a LCC by itself. AirAsia Japan will pause operations at the end of Oct-2013 and resume flying in late Dec-2013 under a new reservation system and with a new fleet of A320s; AirAsia Japan's fleet will be returned to AirAsia.
Vanilla Air plans to have 10 A320s in 2015, making it smaller than Jetstar Japan or Peach. Its domestic and international route network will be similar to AirAsia Japan's but include the leisure beach markets of Guam and Saipan. Vanilla Air will take up AirAsia Japan's Tokyo Narita base, maintaining a split as ANA's partially-owned LCC Peach is based at Osaka Kansai. Full network details will be released in Sep-2013 with sales to commence in Nov-2013 for a late Dec-2013 launch. Before then, ANA has its work cut out to almost create a carrier from scratch as it gets cut off from the AirAsia systems it had been riding on.
Korean LCCs are increasing their market share, accounting for 10% of the international market and just under 50% in the much smaller domestic arena. But they are still passing up numerous opportunities, and these are becoming more apparent and with greater impact as LCCs increase in North Asia, notably Japan.
Two – Air Busan and Jin Air – are tethered to their full-service parents while independent Jeju Air has done comparatively well and preparing for an IPO to advance growth. But smaller independent LCCs Eastar Jet and t'way are still moving up. They straddle the low-cost and full-service spectrum, being closer to low fare than low-cost airlines. While they argue the Korean market is not ready for LCCs, they know they must move as international competition intensifies. They only need to look at Japan's Peach, which is finding success in another market once thought to be too sensitive for LCCs. AirAsia Japan's failure is a reminder that finding the nuances and achieving balance between management style, market demand and the balance sheet is not easy.
LCCs help Japanese domestic market grow for first time in six years, but market situation still dire
The introduction of three low-cost carriers to Japan in 2012 – Peach, Jetstar Japan and AirAsia Japan – may still be fragile with Jetstar Japan curtailing growth and AirAsia Japan losing its founding partner, but the three are showing meaningful improvements to the Japanese economy. In the 12 months to 31-Mar-2013, their passenger traffic has given the Japanese domestic air market, the world's third largest, a needed bump by helping it grow for the first time since 2006.
But the situation is still dire. 2012 was only the third year of growth since 2002, and passenger numbers in 2012 are the same as they were in 1997. No other major market in the world – and high-growth Asia especially – has seen such abysmal performance. International traffic fared only slightly better, with 2012 traffic around only 1999 levels. And despite innovation and new best practices, load factors in the domestic market are at the same low 60% figure of two decades ago. Incumbents have signalled they must change. LCCs may force it.
Positive change continues to occur in Taiwan. A year ago its attitude towards new local entrants was obscure but now it is becoming clear and has fewer obstacles, further illustrated by recent changes that lower the entry barrier for a company that wishes to establish a new airline – such as a low-cost carrier. Majority Taiwanese ownership is required and the Taiwanese company establishing a LCC must be in air or sea transport or trade enterprise, a wide but not unlimited category. A new entrant would not be restricted to the tiny domestic market. The mood is that a home-grown LCC (or two) is now a question of when and who.
AirAsia and Peach could be contenders in addition to LCC subsidiaries of existing Taiwanese airlines. While air service agreements are liberalising, especially in the key Japanese market, it may still be sometime before Taiwan receives its own LCC. Landing fees outside of Taipei are being reduced but there is no definitive plan for a low-cost terminal or other incentives.
Great news! CAPA now offers email and phone contact functionality through its partnership with Gooey. Corporate access for this feature is USD1000 per annum.