Tuesday, April 15th, 2014
SEOUL, KOREA - Competition over the skies of Northeast Asia is getting fiercer as low-cost carriers are moving into flight routes serving cities in China, Japan, and Korea. Following an announcement last year by the Chinese government to nurture home-grown low-cost airlines, Japanese budget airlines are expanding aggressively in adding new regional lines. Malaysia's AirAsia, Asia's largest low-cost carrier, is also set to enter the Korean market after declaring that it would make a second attempt to enter the Japanese market.
The international airline market of Northeast Asia is one of the most crowded in the world. In the region's three countries, the demand for short-haul flights is rising much more rapidly than long-distance ones. For example, the number of passengers flying to Chinese destinations from Japan increased 116 percent from the previous year. The number for passengers from Japan to Korea has also risen 102 percent during the same period.
Thanks to the government's active promotion, Juneyao Group set up Jiuyuan Airlines, a Guangzhou-based budget no-frills carrier, in February this year. Just as the name (9 yuan or about US$1.45) suggests, the new airline tried to attract budget-conscious passengers with low ticket prices. Following domestic flight routes, it will soon begin serving regional routes including Korea and Japan. Not to be outcompeted, Japanese airliners are responding by launching services in droves. All Nippon Airways has begun services to Incheon while Japan Airlines too will open flights to Korea with its own budget airline Jetstar Japan.
In addition, Tony Fernandes, the iconic CEO of AirAsia, announced on April 10 that his company would move again into the Japanese market by 2015. Earlier in 2011, the Malaysian low-cost carrier entered the market jointly with All Nippon Airways, but folded in October last year due to business underperformance.