Japan Airlines Corp's five major lender banks reportedly reached a basic agreement to provide JPY284.9 billion (USD3.4 billion) in loans to the carrier (The Nikkei/Nihon Keizai Shimbun/Kyodo, 20-Nov-2010). Interest and other details will reportedly be determined at a later date with the plan expected to gain approval from the Tokyo District Court by the end of this month. The carrier is expected to receive the loans by Mar-2011. JAL will repay all JPY319.2 billion (USD3.8 billion) in existing debt in line with the plan submitted to the court in late Aug-2010.
JAL reaches basis accord with lender banks on new loans
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Korea-Japan: LCCs are poised to overtake full service airlines for first time in Northeast Asia
For the first time in Northeast Asian aviation, low cost airlines are poised to overtake full service airlines in a significant way. The market concerned is that between Japan and Korea, where LCCs are rapidly growing, while full service airlines are decreasing capacity. Overall market size and visitor figures are at record highs. This refutes any legacy airline thinking that LCCs "steal" market share; LCCs are growing the market and becoming the future – as they already are in other parts in the world.
LCCs accounted for 1% of available seats between Japan and Korea in 2009, reached 37% in 2016, and so far in 2017 will account for 49% of the market. Limited airport data indicates that LCCs, operating at higher load factors, already transport more passengers than full service airlines, and by the end of 2017 LCCs should easily account for the majority of capacity.
LCCs already fly more airport pairs than their full service counterparts. The LCC development between Japan and Korea illustrates underlying LCC opportunity in Northeast Asia but also reflects on the importance of liberalisation, and for full service airlines to have efficient cost bases.
Finnair accelerates capacity growth, led by long haul; seeks cost efficiency through fleet & labour
In 2016 Finnair accelerated its rate of capacity growth after a modest return to expansion in 2015, following cuts in 2014. It also experienced a fall in unit revenue (as did most European airlines), most notably in the regions of highest capacity growth, i.e. the long haul markets North America and Asia.
Asia is Finnair's most important long haul market (Japan and China are its two biggest markets by ASKs) and its ranking by seats on routes between European and NE/SE Asia is disproportionate. It has ambitious growth plans in the region and will increase frequencies to Tokyo and Hong Kong this summer. Its long haul network, which will also extend to San Francisco this summer and Goa next winter, is largely founded on connecting traffic via its Helsinki hub.
Finnair's return to capacity growth has coincided with a return to profit, but lower fuel prices were the main driver of its bottom line improvement. Its profit margins remain slim and, beyond the vagaries of fuel price benefits, Finnair aims for more sustainable unit cost cuts. Fleet strategy and labour productivity form a two pronged attack on its cost base.