Starting a discount airline will help the carrier widen its product line-up, JAL’s vice chairman Junko Okawa was quoted as saying Monday (May 7) in a Bloomberg report. This is among the several options the company is exploring, she said, adding that no decision has been made yet.
Japan Airlines Co. (JAL) is looking into setting up a new low-fare carrier to increase capacity and take on the rising competition from budget operators in Asia’s second-largest economy.
Starting a discount airline will help the carrier widen its product line-up, JAL’s vice chairman Junko Okawa was quoted as saying Monday (May 7) in a Bloomberg report. This is among the several options the company is exploring, she said, adding that no decision has been made yet.
Asia’s budget airline revolution has been slow to sweep Japan, a market that JAL and its bigger rival ANA Holdings Inc. have dominated for decades.
In recent years, low-fare carriers AirAsia Bhd., Jetstar Japan and Peach Aviation Ltd. have benefitted from the country’s tourism boom, weaning passengers away from legacy operators. The country’s Shinkansen bullet trains also offer stiff competition to planes on internal routes.
Last year, foreign visitor arrivals rose 19% to a record 28.7 million, with the majority originating from China, South Korea and Taiwan, according to Japan National Tourism Organization.
As part of a mid-term plan, JAL is aiming to get 50% of its revenue from international passengers by 2020, up from 30% last year, Okawa said.
These expansion plans come after the carrier emerged from bankruptcy earlier this decade after the government ended its oversight last year, freeing the carrier to revive its business and regain some of the market share ceded to ANA.
The airline is beefing up its fleet in preparation for the 2020 Summer Olympics and attempting to secure more takeoff and landing slots at Tokyo’s Haneda airport.