Low cost flying arrives in luxury loving Japan

By Yuri Kageyama

Associated Press

Published: Wednesday, Oct. 3 2012 12:00 a.m. MDT

Such spending has lost some of its glamor as Japanese become less status-conscious, perhaps poorer and look for discounts. Such shifts in consumer tastes is underlined in the popularity, for instance, of Fast Retailing Co.'s no-nonsense Uniqlo clothing chain, which is also opening shops in the U.S.

Geoffrey Tudor, analyst with Japan Aviation Management Research, said low-cost carriers are introducing the fun of flying to young people and retirees. They are also popular with families who live apart to juggle work assignments and children's education needs — a practice so widespread a special phrase has been coined to describe it, "tanshin funin."

Jetstar Japan Chief Executive Miyuki Suzuki said a tenth of those who use her carrier are first-time fliers.

"We aim to grow the piece of the pie," she told reporters recently. "People can travel more for less and have many more experiences."

Jetstar Japan is a third owned by Australia's Qantas Airways Ltd., and a third owned by Japan Airlines Co., which is making a soaring comeback, thanks to a 350 billion yen ($4.5 billion) government bailout from bankruptcy two years ago and generous tax breaks that continue for several years. Mitsubishi Corp. and Century Tokyo Leasing Corp. are its other shareholders with 16.7 percent each.

AirAsia Japan is 49 percent owned by AirAsia, a Malaysian low-cost carrier founded in 1993, whose motto is "Now everyone can fly," and 51 percent by All Nippon Airways Co., or ANA, JAL's rival.

ANA is also a 38.7 percent investor in Peach, a joint venture with Hong Kong investment group, First Eastern Aviation Holdings. Peach offers flights out of Kansai International Airport in Osaka, central Japan.

AirAsia Japan offers flights out of Narita, the Tokyo airport, to Sapporo, Fukuoka and Okinawa in Japan, and plans to start them to Seoul and Pusan in South Korea later this year. Flights to the Philippines and Guam are in the works as well.

While expanding Haneda has given a boost to the airline travel market, officials say more needs to be done. Landing fees at Japanese airports are among the highest in the world, endangering Tokyo's role as an Asian hub.

Tony Tyler, director and chief executive of the International Air Transport Association, said all carriers need to bring costs down if they hope to survive, but was upbeat about Japanese LCCs.

"In many parts of the world, the low-fare sector has tapped into demand from new market sectors. So they have grown the market, rather than cannibalized it," he said.

Also sold on low-cost carriers was Hirotaka Yamamoto, 22, who goes to college in Tokyo but hails from the northernmost island of Hokkaido. He surprised his parents over the summer by going home, thanks to the 24,000 yen ($300) round-trip fare on Jetstar, less than half of what he paid in the past.

"They were surprised to see me and so happy," he said. "I hope the tickets keep getting even cheaper."

Follow Yuri Kageyama: www.twitter.com/yurikageyama

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