Japan Airlines mulling launch of budget airline
Japan Airlines said it is mulling setting up a budget airline unit as no frills travel finally starts to gain traction in Japan.
JAL is considering starting a budget carrier, vice chairperson Junko Okawa said in an interview.
This is one of several options under consideration as JAL looks to broaden its fare product range.
"JAL has been focusing on premium full service so far, but as the popularity of LCCs spreads far and wide in the region, it is natural for companies like JAL to expand their line-up to low-price," Kyouko Amemiya, a senior adviser at SBI Securities Co in Tokyo told Bloomberg.
JAL already has a stake in budget carrier Jetstar Japan.
JAL has been stymied from acting earlier as the Japan government had blocked any significant expansion as part of JAL’s bailout from bankruptcy many years ago.
That restriction ended last year, freeing up the airline to make its own expansion decisions.
Apart from Jetstar Japan, Vanilla Air, AirAsia and Peach Aviation Ltd compete for budget travellers in Japan, but Japan’s affordable bullet trains also offer stiff competition for domestic travel.
Japan posted a record 28.7 million based on data from the Japan National Tourism Organization.
JAL is targeting 50% of all revenue from international passengers by 2020, when Tokyo hosts the Olympic Games, Okawa said.
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