The start of a new era in Japan and wider North Asia region as LCC Peach Aviation launches

Just a few years ago, the North Asia aviation industry stood out because of the rigidity of its regulatory regimes. But much has changed in the past couple of years. A combination of traffic growth, new entry and accompanying liberalising trends is reshaping what is potentially a massive intra-regional market. 01-Mar-2012 marked another landmark date in this change, with Peach Aviation launching operations with a flight from its Osaka Kansai base to Sapporo New Chitose, an event Peach Aviation CEO Shinichi Inoue said "opens a new era of the Japanese airline industry". With two more low-cost airline subsidiaries preparing to launch services later this year and home-grown low-cost operator Skymark planning to spread its wings internationally, Japan is standing out as the key driver of change in the North Asian aviation market.

The start of domestic operations at Peach, which labels itself as the first "genuine LCC" in Japan despite Skymark's presence in the market, is likely to intensify competition in the aviation and rail sector within Japan. Its entry, even after only one day, is having an impact, triggering fare reductions and route launches by Skymark on key Peach routes.