Skymark Airlines plans 'Narita Shuttle' low-cost carrier

In a dramatic escalation of low cost competition in Japan, Skymark Airlines yesterday announced plans to launch an LCC operation called the 'Narita Shuttle' from Nov-2011 - several months ahead of the launch of All Nippon Airways' planned LCC JV at Kansai.

The Shuttle will operate to up to six cities with twice daily frequency to destinations which could include Hokkaido's Sapporo (Shin Chitose Airport), Asahikawa - also in Hokkaido - from Nov-2011 and Naha (Okinawa) and Fukuoka from Feb-2012. Skymark selected Narita citing higher operating costs at the downtown Tokyo Haneda Airport.

Skymark plans to offer introductory fares from JPY980 (USD11.68), with an allocation of 28,800 seats. About 75% of the regular fares on the shuttle would be lower than JPY10,000 (USD119). The airline plans to expand it fleet from 18 B737s to 27 by Mar-2013. The airline has also ordered four A380s to launch international services to London from 2014.

Skymark's shares fell 1.3% yesterday, while ANA fell 1.7%.

Selected APAD daily share price movements (% change): 13-Apr-2011