Japan Airlines to establish mid- to long-haul LCC

Japan Airlines (JAL) is to establish a new low-fare airline business for the international market, with the aim of developing new business opportunities.

The new low-cost business will target international routes with medium- to long-haul flights, and will aim to provide passengers with new options when travelling to or from Japan.

The company will be a consolidated subsidiary of the JAL Group and plans to operate flights from Narita International Airport to destinations in Asia, Europe and the Americas. In the first stages of its establishment, the carrier will operate two Boeing 787-8 aircraft, and is aiming to launch commercial flights from the summer of 2020, when the airport plans to complete enhancements to its facilities.

JAL will continue to refine its full-service carrier model and make key investments into Jetstar Japan, a low-fare Japanese airline partnership between Qantas Group, Japan Airlines, Mitsubishi Corporation and Tokyo Century Corporation.

With the new low-cost carrier (LCC) business, the company aims to create new demand, working alongside the services provided by Jetstar Japan, which focuses on domestic and short-haul international flights.

In alignment with the company’s Medium Term Management Plan, the LCC business is part of JAL’s ’10 Year Grand Design’ strategy through which the company aims to accelerate growth while contributing towards the country’s target to increase the number of tourists to Japan. The new brand’s name is yet to be announced but has a ‘tentative’ establishment date of July 2018.

Regional Competition

The region has seen recent developments in the low-fare aviation sector, with ANA Holdings announcing earlier this year that it’s two budget subsidiaries, Peach Aviation and Vanilla Air, were to combine to become the ‘leading low-fare airline’ in the Asian region.

ANA Holdings said the integration process was planned to begin in the second half of FY2018 and to be completed by the end of FY2019, with the combined carrier planned to enter the mid-haul low-fare market, while also contributing to the Japanese government’s tourism goals.

The newly combined airline is planned to have more than 50 aircraft operating on more than 50 routes beyond FY2020.

Image: Japan Airline’s 787 in-flight

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