Low-cost carriers boost market share to Japan

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Low-cost carriers boost market share to Japan

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Low-cost carriers are expanding their presence on routes to Japan, while flagship carriers are focusing on serving transfer passengers.

According to Jeju Air, the nation’s largest low-cost carrier (LLC), budget carriers accounted for 29.2 percent of passengers who flew between Korea and Japan in the first five months of the year, an increase of 8.8 percentage points from 2013 and 20.3 percentage points from 2012.

Korean and Japanese LCCs served 756,200 passengers this year through May, nearly 200,000 more than last year.

In contrast, flag carriers have seen a 14 percent decrease over the past three years. Korean Air Lines (KAL), Asiana Airlines, Japan Airlines (JAL) and All Nippon Airways (ANA) transported 1.83 million passengers through May, which is nearly 700,000 less than in 2012, data showed.

For instance, on the route between Incheon International Airport and Narita International Airport in Tokyo, full-service carriers had 556,200 passengers in the first five months of this year, 73.8 percent of total passengers on the route. In 2012, they transported 817,000 passengers, or 95.7 percent of passengers on the route.

Asiana Airlines was No. 1 on the Incheon-Tokyo route with 214,200 passengers through May, followed by KAL and Jeju Air.

Industry insiders say that the number of travelers between the countries has declined and LCCs have been moving aggressively to expand their presence with low-priced tickets and new routes.

According to data from Korea Tourism Organization, only 990,143 Japanese visited Korea in the first five months of this year, down 13 percent from a year ago, while 1.06 million Koreans visited Japan, down 3.6 percent.

Because of the fast ascent of LCCs, full-service carriers have been reducing flights. JAL has had no flights from Incheon to Nagoya and Osaka since 2012, while ANA ended flights to Tokyo and Osaka.

Although overall demand is decreasing, transfer passengers using flag carriers are on the rise, accounting for 22.4 percent of their passengers between Korea and Japan. In 2012, the share was 13.2 percent.

The five Korean LCCs had 74.4 percent of passengers on their Korea-Japan routes from January through May. This is a 5.9 percentage point increase from a year ago.

Of LCCs from the two countries, Jeju Air was the first to establish a regular route in March 2009, followed by Air Busan in 2010, and Eastar Jet, Jin Air and T’Way Airlines in 2011.

For Japanese LCCs, the first to fly to Incheon was Peach Aviation in 2012, followed by AirAsia Japan, now Vanilla Air, in March.

Starting next week, all airlines and travel agencies must show the total fare on their tickets, the Ministry of Land, Infrastructure and Transport said yesterday.

Therefore, airlines need to show not only the price of the boarding pass, but also fuel surcharges, airport usage fees and other related costs.


BY joo kyung-don [kjoo@joongang.co.kr ]




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