Paper for the 14th ATRS World Conference in Porto, Portugal, 6-9 July 2010 Main factors that hamper LCCs development in Japan

摘要

Today, Low Cost Carriers (LCCs) have already become major players in the airline industry in the U.S., Europe and Eastern Asia and provide consumer benefits. On the other hand; however, there has never been a low cost carrier in Japan in a true sense. After the deregulation, five airlines have entered the market but none of them become an LCC though they tried. This paper aims to identify the main factors that hamper the development of LCCs in Japan. To this end, Skymark airlines, closest to the traditional LCC business model, is chosen as a case study. Interviews with CFO of Skymark as well as government officials were undertaken. Comparison in terms of costs per RPK (revenue passenger kilometer) and ASK (available seat kilometer) among Skymark, Southwest and easyJet was made. Finally, four main factors that would hamper LCC’s development in Japan are identified and policy directions to address them are suggested.