Japan's LCC markets: Jetstar and Peach expand internationally

Japan's inbound tourism continues to expand rapidly, and the government has further growth targets. This may appear to be ideal for Japan's growing LCC sector.

Japan's LCCs are expanding internationally, although in recent times they have been maintaining balance with domestic flying. Peach is Japan's largest international LCC and is nearly twice the size of the second largest, Vanilla Air, with which it will merge. Yet the largest LCC serving Japan is actually a foreign one: Jeju Air.

International flying represents growth for Japan's LCCs, but there are significant challenges. Even though Japanese LCCs are low cost, they are medium and high cost compared to airlines from other countries - even full service Chinese airlines. Foreign airlines hold a geographical advantage for serving Japan's large network of underexploited secondary cities.