Aviation Policy for the Advent of the LCC Age. Akihiko TAMURA. January 8 th 2013 Director-General, Civil Aviation Bureau,

Transcription

1 Aviation Policy for the Advent of the LCC Age January 8 th 213 Director-General, Civil Aviation Bureau, Ministry of Land, Infrastructure, Transport and Tourism Akihiko TAMURA Ministry of Land, Infrastructure, Transport and Tourism

2 1.Current Status of Air Transportation

3 Trend of Air Passenger Transportation in the World (million passengers) 1,8 1,6 1,4 1,2 1, 8 6 国際線旅客 International 国内線旅客 Domestic Source:Annual Report of the Council, ICAO (International Civil Aviation Organization) 2

4 Trend of GDP Growth and Number of Air Passengers in the World (%) GDP GDP 成長率 growth ( 各国 rate GDP 1) の購買力平価換算 (PPP rate base) 1) ) 世界の航空旅客数増加 Rate of increase in the 2) 率 number ( 国際 + of 国内 air passengers ) (Int l + Domestic) 2) ). Annual Report of the Council, ICAO 2). World Economic Outlook, IMF(International Monetary Fund) 3

5 Forecast of Air Traffic Growth in the World ( ) Major increase in air traffic (Total number of international and domestic traffic) Europe 1,413 2,614 Asia Pacific Region 4,99 North America 2,717 Annual average: +3.1% 1,365 1,431 Middle East 383 1,452 Annual average: +6.6% Annual average: +3.3% 111 Africa Annual average: +6.9% 327 Annual average: +5.6% Air traffic in 211 Forecast of air traffic in 231 Annual average growth rate during the period Latin America/Caribbean countries Annual average: +6.1% Source:Japan Aircraft Development Corporation 4

6 Trend of International Air Passenger Transportation in Japan (1 thousand people) 8, Iraq war/sars (March-April 23) Bankruptcy of Lehman Brothers (September 28) the Great East Japan Earthquake (March 211) 7, 6, FY211 air passengers 54.4mil September 11 Attacks (September 21) Opening of Centrair (February 25) local areas 5.8mil (1.6%) 5, 4, Opening of Kansai (September 1994) Centrair /Nagoya 4.4mil (8.1%) Kansai 1.1mil(18.6%) 3, Opening of Narita (May 1978) 2, 1, Narita/Haneda 34.1mil (62.8%) Note) The number of passengers at Osaka International Airport was applied before the opening of Kanai International Airport. ( FY ) * Compiled based on materials of MLIT 5

7 Trend of Domestic Air Passenger Transportation in Japan (1, people) 12, 1, FY211 air passengers 79.1mil local areas 12.4mil (15.7%) 8, Centrair / Nagoya (excluding Haneda flights) 4.6mil (5.8%) 6, Kansai / Itami (excluding Haneda flights) 9.5mil (12.%) 4, Haneda and Itami / Kansai 5.9mil (7.4%) 2, Haneda 46.7mil.people59.1%) Total passengers from/to Haneda Airport 52.3mil.people(66.5%) ( FY ) 6 * Prepared by JCAB based on the Annual Report of Air Transport Statistics.

8 Trend of Domestic Air Passenger Transportation by purpose in Japan The number of domestic air passengers Trend of domestic air passengers (1981 = 1) (million) 6 5 (%) 仕事 Business 観光 Sightseeing 帰省 私用 Homecoming その他 Other 仕事 Business 観光 Sightseeing 帰省 私用 Homecoming Business demand increased gradually, but fell sharply in 29 Demand for sightseeing increased rapidly from late 8 s, but recently it s in decreasing trend 7

9 Relativity between Domestic Air Passenger Transportation in Japan and GDP / Salary (1981=1) (%) (%) 仕事 Business 観光 Sightseeing (Left axis) 帰省 私用 Homecoming GDP Real ( 実質 GDP ) 平均給与 Ave. salary / イールド比 / Yield (Right axis) GDP:Cabinet Office, Government of Japan Ave salary:financials Services Agency Trends of business and homecoming are generally consistent with trend of GDP Demand for sightseeing seems related to average salary/ yield ratio 8

10 Trend of Yield for Airlines in Japan (Yen/person-kilometer) Yield (int'l) 国際線イールド Yield (domestic) 国内線イールド Double tracking (.7mil/year) and triple tracking (1mil/year) Double tracking (.4mil/year) and triple tracking (.7mil/year) Double tracking (.2mil/year) and triple tracking (.35mil/year) Abolition of double and triple tracking 2. SKY/ADO entry ANA entry into international market September 11 Attacks Bankruptcy of Lehman Brothers. (FY) 9

11 Trend of Yield for Airlines in U.S. Yield (cent) Bankruptcy of Lehman Brothers ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 ネットワークキャリア FSA(int'l) ( 国内 ) ネットワークキャリア FSA(domestic) ( 国際 ) LCC Yield= Revenue / RPK 9= 7.2 ($1= 8) Source:LCC includes the domestic and international, Institution for Transport Policy Studies 1

12 2.LCC Entry into Market

13 Background of LCC Entry Lower barrier to new entry Deregulation The Internet as a cost effective distribution channel Changes to the business travel market Price is more important to business travelers Travel agencies also demand low prices The market for cost-sensitive has rapidly expanded since late 199s 12

14 Characteristics of LCC Business Model Mainly short & point-to-point traffic Secondary airports policy Short turnarounds/high aircraft utilization Low distribution costs/limited on-board service Low fleet costs by a commonality policy Provide service with low costs & low fares 13

15 The LCCs in the World LCCs have been actively developing business in the US, Europe and the South-East Asian markets. Thai Air Asia Easy Jet One Two Go West Jet Can Jet Nok Air <Thai> Jet Blue Ryanair Cebu Pacific Air Vueling Air Asia X Southwest Tiger <Singapore > AirTran Germanwings <Lufthansa> Jet Star Asia <Quantas> Spirit GOL WIZZ Air Virgin Blue <Virgin Atlantic> Lion Air Jet Star <Quantas Airways> (Legend) Independent LCC Affiliated LCC Source: Pre pared by JCAB based on each airline s website 14

16 LCC Market Share in the World (Seat-kilometer Based) 3% 25% 2% 15% 1% 5% 8% 1% 12% 14% 15% 17% 19% 21% 22% 23% 24% % '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 LCC シェア share Source:CAPA Centre for Aviation HP 15

17 The Share of LCC in the World Shares of LCC by regions seat km based 北米 North America 中南米 Latin America 29.7% 31.8% 西欧 West Europe 38.3% 東欧 East Europe 2.8% 中東 Middle East アフリカ Africa 11.3% 11.7% 北東アジア North-East Asia 6.9% 東南アジア South-East Asia 32.4%.% 5.% 1.% 15.% 2.% 25.% 3.% 35.% 4.% North-East Asia :Japan, Korea China, Taiwan, Mongol Source:CAPA Centre for Aviation HP 16

18 The Ranking of Airlines in the World (212) International Domestic Airlines Number of Passengers Airlines Number of Passengers 1 Ryanair 76,422 2 Lufthansa 49,755 3 Easy Jet 42,28 4 Emirates 32,73 5 Air France 32,597 6 British Airways 29,37 7 Air Berlin 25,825 8 KLM Royal Dutch 25,66 1 Southwest 11,587 2 Delta 92,23 3 China Southern 74,648 4 American 65,33 5 US Airways 46,619 6 China Eastern 45,595 7 Air China 42,72 8 United 4,524 Source:World Air Transport Statistics 56 th edition, IATA(International Air Transport Association) 17

19 Unit Cost of Airlines in Japan & U.S. (FY211) Yen / person kilometer ANA JAL Skymark United Delta Southweat Southwest The unit cost bases on consolidation. 1$=78.425yen Source: Prepared by JCAB 18

20 Trend of Airline Performance (Japan & U.S.) The trend for Japanese airlines 1) The trend for U.S. airlines 2) Sales revenue (1 million -yen) Operating profit margin (%) Sales revenue (million $) Operating profit margin (%) 3, 16.% LCC 25, 2, 15, 14.% 12.% 1.% 8.% 1, 5, 6.% 4.% 2.% ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11.% FSA 12, 1, 8, 6, 4, 1.% 5.%.% -5.% -1.% Sales revenue 1. Japanese are JAL, ANA and Skymark. : Prepared by JCAB 2. Institution for Transport Policy Studies Operating profit margin 2, ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 Sales revenue 営業収入 Operating profit margin 営業利益率 -15.% -2.% 19

21 Breakdown of New Demand for LCC in Europe Percentage of transition from other Breakdown of new demand for LCC Percentage 1% 9% 8% 7% 4% 37% Unknown Transition from other 1% 9% 8% 7% 8% 6% 15% Others Transition from railway Transition from vehicle 5% 4% 9% 6% 6% 5% 5% 4% 3% 2% 59% New demand 4% 3% 2% 71% Group with no trip demand in the past 42% 1% 1% % % Source: Liberalization of European Air Transport, ELFAA, 24 2

22 Foreign LCCs Operating in Japan Original schedule for winter 212 Country/Region Airlines Date of Launch Route Remarks Jeju Air March 2, 29 Kansai=Incheon (daily) Kansai=Gimpo (daily) Kansai=Jeju (3 times a week) Chubu=Gimpo (daily) Chubu=Incheon (daily) Fukuoka=Incheon (daily) Korea Air Busan March 29, 21 Fukuoka=Busan (twice a day) Kansai=Busan (twice a day) Narita=Busan (daily) Capital: Asiana 46% Jin Air July 15, 211 Shin Chitose=Incheon (5 times a week) Capital: Korean Air 1% Easter Jet May 5, 211 Narita=Incheon (daily) Kansai=Incheon (twice a day) T way December 2, 211 Fukuoka=Incheon (twice a day) China Spring June 23, 212 Ibaraki=Shanghai (5 times a week), Kansai=Shanghai (daily from Jan. 25, 213), Takamatsu=Shanghai (3 times a week), Saga=Shanghai (3 times a week), Singapore Jetstar Asia July 5, 21 Kansai=Taipei=Singapore (twice a day) Kansai=Manila=Singapore (4 times a week) Capital: Qantas Group 49% Scoot October 2, 212 Narita=Taipei=Singapore (daily) Capital: Singapore 1% Malaysia Air Asia X December 9, 21 Haneda=Kuala Lumpur (daily) Kansai=Kuala Lumpur (4 times a week) Philippines Cebu Pacific Air November 2, 28 Kansai=Manila (3 times a week) Australia Jet Star March 25, 27 Narita=Gold Coast (daily) Narita=Cairns (daily) Kansai=Gold Coast (5 times a week) Sydney-Cairns-Kansai-Cairns (4 times a week) Darwin=Manila=Narita (4 times a week) Darwin=Singapore=Kansai (4 times a week) Capital: Qantas Group 1% May change during the period 21

23 Japanese LCCs Name Peach Aviation., Ltd AirAsia Japan., Ltd Jetstar Japan Co., Ltd 15 bil. yen 2.5 bil. yen planned to be doubled 9.6 bil. yen planned to be 12 bil. yen Capital ANA 38.7% First Eastern Aviation Holdings Ltd. 33.3% Innovation Network Corp. of Japan 28.% ANA 67% AirAsia 33% Quantas 33.3% JAL 33.3% Mitsubishi Corp. 16.7% Century Tokyo Leasing Corp. 16.7% Hub airport Kansai Int l Airport Narita Int l Airport Narita Int l Airport Aircraft A32-2 A32-2 A32-2 Flights Domestic: Kansai=Sapporo (Mar.1, 212) Kansai=Fukuoka (Mar.1, 212) Kansai=Nagasaki (Mar. 25, 212) Kansai=Kagoshima (Apr.1, 212) Kansai=Naha (Oct.18, 212) International: Kansai=Incheon (May 8, 212) Kansai=Hongkong (Jul. 1, 212) Kansai=Taipei (Oct.16, 212) Domestic: Narita=Sapporo (Aug.1, 212) Narita=Fukuoka (Aug.1, 212) Narita=Naha (Aug.3, 212) International: Narita=Incheon (Oct. 28, 212) Narita=Busan (Nov.28, 12) Domestic: Narita=Sapporo (Jul. 3, 212) Narita=Fukuoka (Jul. 3, 212) Narita=Okinawa (Jul.9, 212) Narita=Kansai (Jul.9, 212) Kansai=Sapporo (Aug.24, 212) Kansai=Fukuoka (Aug.24, 212) Kansai=Naha (Oct.28, 212) International: Planning short int l flights to China, South Korea, etc. (in 213) 22

24 The Change of Fares Before & After Narita=Sapporo Narita=Fukuoka [unit: ] , JAL ANA 45, JAL ANA Jetstar Airasia Skymark 45, JAL ANA 45, JAL ANA Jetstar Airasia Skymark 4, 35, 4, 35, 4, 35, 4, 35, 3, 25, 2, 15, 1, 5, 3, 25, 2, 15, 1, 5, 3, 25, 2, 15, 1, 5, 3, 25, 2, 15, 1, 5, Kansai= Sapporo Kansai=Fukuoka , JAL ANA 45, JAL ANA Jetstar Peach Skymark 45, ANA 45, ANA Jetstar Peach 4, 35, 4, 35, 4, 35, 4, 35, 3, 3, 3, 3, 25, 25, 25, 25, 2, 2, 2, 2, 15, 15, 15, 15, 1, 1, 1, 1, 5, 5, 5, 5, Source : Fares with notification by June 12 th

25 Market Expansion by the Entry of LCCs (Tokyo Metropolitan Area=Sapporo) Haneda- Sapporo + Narita- Sapporo ll Tokyo metropolitan area- Sapporo Passengers (thousand) 3, 2,5 2, 1,5 1, Passengers (thousand) H22.7~9 H23.7~9 H24.7~9 Passengers (thousand) 3, 2,5 2, 1,5 1, 5 H24.9 (quick estimation) 2,621 2,589 2,543 H22.7~9 H23.7~9 H24.7~ ,71 2, ,814 H22.7~9 H23.7~9 H24.7~9 FSA LCC FSA LCC FSA 24

26 Market Expansion by the Entry of LCCs (Kansai Area=Sapporo) Kansai- Sapporo + Itami- Sapporo + Kobe- Sapporo Passengers (thousand) Passengers (thousand) Passengers (thousand) H22.3~8 H23.3~8 H24.3~8 299 H22.3~8 H23.3~8 H24.3~ LCC FSA FSA FSA ll Kansai area- Sapporo Passengers (thousand) 1,5 1, 5 H22.3~8 H23.3~8 H24.3~8 1,29 1,78 1,32 LCC FSA H22.3~8 H23.3~8 H24.3~8 25

27 LCC s Share of Passengers in Domestic Flights (Europe & Japan) In Europe, 2 2.5% In Europe, % In Japan, September 212 (After a half year since the start of LCC ) 3.2% LCC LCC 非 LCC Non-LCC LCC LCC 非 LCC Non-LCC Total number of passengers using pre-existing air carriers and LCC has also increased by 17%. Source: Seat-km based data, MLIT s research reports and data in 211, etc. Non-LCC (domestic): specified Japanese air carrier The number shown as of September 212 is the preliminary result 26

28 3.Aviation Policy for Growth

29 Policy on Aviation & Airports Background : Increase of Airport Capacity at Haneda & Narita Framework Promotion of Open Skies Policy Airlines Promotion of New Services incl. LCCs Effect Growth of Aviation Sector Development of Japanese Economy Infrastructure Promotion of Airport Management Reforms 28

30 Increase of Annual Slots at the Airports in Tokyo Metropolitan Area Haneda (slots for int l flights) Narita Total [ 1, slots ] Until October 21 (Before the D-runway at Haneda was put into service) At present (Since March 25, 212) 39 (6) From the 213 summer schedule (After March 31, 213) 41 (6) for domestics Final form Haneda: at the end of FY 213 Narita: during FY (9) 3 for Internationals *1. All the numbers are showing slots per year. *2. As the count of the slots is one slot for a take-off and one slot for a landing, one take-off and landing is counted as two slots. *3. With regards to the schedule of Narita Airport in the future, the assumption is for the earliest scenario. *4. In the number of take-off and landing slots at Haneda Airport the number of slots to be used for the operation of international charter flights early in the morning and late at night is also included. 29

31 The Progress of Talks on Open Skies 13 U.K. Jan. 2, 212 (.65 mil., 1%, 13th) 18 China (Note1) Aug. 8, 212 (7.94 mil., 15%, 3rd) 7 Macau July 14, 211 (.7 mil.,.1%, 31th) 23 Thailand (Note2) November 21, 211 (2.28 mil., 4%, 6th) 15 Sri Lanka March. 23, 212 (.6 mil.,.1%, 32th) 3 Singapore Jan. 19, 211 (1.79 mil., 3%, 7th) 8 Indonesia Aug. 11, 211 (.62 mil., 1%, 14th) Legend Name of country or region The Date of Agreement (or Schedule) (Number of passengers, percentage, Ranking) 17 France July 7, 212 (1.12 mil., 2%, 1th ) 16 Finland Jun. 8, 212 (.4mil., 1% 19th) 2 Sweden Oct. 11, Norway Oct. 11, Denmark Oct. 11, 212 (.13 mil.,.3%, 29th) 19 Netherlands Aug. 23, 212 (.48 mil., 1%, 17th) 5 Hong Kong May 19, 211 (3.55 mil., 7%, 5th) 6 Vietnam June 9, 211 (.94 mil., 2%, 12th) 11 Brunei Oct. 28, Malaysia Feb. 24, 211 (.53 mil., 1%, 16th) 1 Australia Sept. 29, 211 (.94 mil., 2%, 11th) 14 New Zealand Feb. 16, 212 (.2 mil.,.4%, 22gh) 2 South Korea Dec. 22, 21 (1.6 mil., 2%, 1st) 12 Taiwan Nov. 1, 211 (4.67 mil., 9%, 4th) Countries & regions agreed 23 9 Canada Sept. 14, 211 (.58 mil., 1%, 15th) Number of passengers from/to Japan 47.5 mil. (FY 21) 1 U.S.A Oct. 25, 21 (9.96 mil., 19%, 2nd) As of Nov. 21, 212 Coverage ( ) 91 % ( )The total number of passengers arrive in and departure from Japan=52.8 mil. (FY21) The open skies including the Tokyo metropolitan area airport will come off at the time Narita airport s annual arrival and departure slots achieved 27,, which is scheduled in the summer of 213. (Note1) The open skies with China came to realization except for the airports in Beijing, Shanghai, Narita, and Haneda. (Note 2) The content of agreement with Thailand will be formally confirmed when Thai s domestic procedures completed. 3

32 Actions for Promoting New Entry 1. Revision of technical regulations Corresponding to the progress of aviation technology, and to the new airline business model 1 items revised (12 items requested) 2. Dedicated terminals for LCCs Simple structure, with low cost at Naha, Kansai & Narita Promoting new entry of airlines including LCCs 31

33 Restructuring Airport Operations Current Landing charges on 27 airports are uniform nationwide and managed in one special account Runway Terminal building Managed by government Managed by company Different management between runway and terminal building Future Unite air-side & land-side Managing income & cost enables each airport to set landing charge flexibly cost reduction 32

34 Thank You for Your Attention