StarFlyer is a low-cost airline with its main base at Kitakyūshū Airport in Fukuoka, Japan. The carrier operates domestic service services between Kitakyūshū Airport (Fukuoka), Kansai International Airport (Osaka) and Tokyo International Aiport.
Location of StarFlyer main hub (Tokyo Haneda Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider StarFlyer 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.
177 total articles
15 total articles
Air Do, based in the Hokkaido region in Japan, is an unusual type of carrier and perhaps one that could only exist in Japan’s atypical domestic environment. It enjoys a strikingly synergistic relationship with All Nippon Airways and leverages a valuable position at slot-constrained Haneda.
Air Do has challenges: Its traffic is highly seasonal, relying on passengers to flee the scorching summer for Hokkaido’s cooler weather. Air Do’s fleet of 767s allows it to target Tokyo-Sapporo, the world’s largest air route, while 737 classics serve thinner points in Hokkaido. But this brings considerable inefficiency to a 13-aircraft fleet, Air Do CEO Sadao Saito told CAPA’s LCCs and New Age Airlines conference in Seoul. Air Do's CASK and yield are lower than at ANA, and Air Do creates efficiency with load factors typically 10ppts higher than at ANA or JAL on overlapping routes. Air Do generally posts profits but with large variance.
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.
ANA looks for international acquisition: talks with Philippines Airlines productive but not end game
Japan's All Nippon Airways (ANA) is flush with funds and looking to acquire foreign carriers as part of a three-pronged growth strategy to counter Japan's declining economy and population. But marriages are seldom consummated without a decent period of courting. ANA has quietly flirted with Indian carriers and is now whistling sweet tunes to Philippines Airlines (PAL), which is looking for foreign airline investors. That fact was confirmed by none other than PAL part-owner San Miguel Corporation, perhaps looking to leverage that news with other potential buyers.
But the possible synergies between ANA and PAL are few. PAL has contentiously exited the Philippines' key low-cost segment and its long-haul ambitions will be challenging given the competition, its lack of geography or scale for connecting traffic, and a low profile without a global alliance or numerous partners. As ANA continues to search for what would be one of Asian aviation's few major cross-border acquisitions, more flirting should be expected.
Diagnosing the exact cause of failure at AirAsia Japan, which will end operations with that name on 31-Oct-2013, is subject to opinion of joint venture partners AirAsia Berhad and All Nippon Airways (ANA), as well as third parties. But most would agree that there have been fundamental structural problems.
Many of the challenges have faced not only AirAsia Japan but also Jetstar Japan and Peach Aviation. Some problems were spotted in advance and intentionally avoided by peers. Collectively, they point towards LCCs having a long-term future in Japan but only under the right circumstances.
AirAsia Japan’s troubles stem from its ownership structure that gives ANA majority control; something that a Japanese carrier does not have in Jetstar Japan or Peach. This allows LCC professionals, not legacy managers, to run the airline.
Call it an unusual, even fortunate, position, but some are quietly wondering if Japan's All Nippon Airways has more cash than it has strategic plans to utilise that capital. ANA in Jul-2012 announced plans to raise as much as JPY211 billion (USD2.2 billion) of capital in a move with coincidental timing, or not: just ahead of the re-listing of rival Japan Airlines, freshly emerged from bankruptcy.
ANA said the funds would primarily support the purchase of 787 aircraft, but then ANA gave the shell shock announcement it would invest in foreign airlines. Another seeming reversal came in Dec-2012 when ANA acquired a stake in an airline – but it was the domestic operator StarFlyer.
Press reports in late Jan-2013 said ANA had been in discussions with Indian carriers following the country's foreign ownership relaxation. ANA has given cool responses to the rumour, and either way synergies from an ANA investment in an Indian carrier would be low and the challenges high.
Japanese aviation is dominated by All Nippon Airways and Japan Airlines, who account for nearly 75% of capacity in the world's fourth largest domestic market. A number of carriers divide the rest, and while they may be small, they are looking to grow domestically, branch out internationally and be innovative to set themselves apart from the ANA and JAL behemoths.
StarFlyer is one of those carriers, and has had profits to support its strategic positioning. It is now slightly accelerating aircraft deliveries to grow domestically – it was the second-largest recipient of newly released slots at prized Haneda airport – and is looking cautiously at the international market.
But mighty change is afoot in Japan, and as LCCs offer seats at prices never before seen and incumbents like Skymark flex their muscles, StarFlyer will see tests of its model of boutique flights that come at a yield premium to the LCCs but priced lower than ANA or JAL. There is comfort in obscurity, with ANA codesharing and taking an equity stake in publicly-listed StarFlyer.
But there are many chapters still to be written in Japanese aviation.
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