AirAsia X sees budget air travel boom in Japan.

http://www.aviationpros.com/news/10658774/airasia-x-sees-budget-air-travel-boom-in-japan

Malaysian low-cost carrier AirAsia X sees a big opportunity in Japan, a new market for budget airlines, and has big plans for expansion, according to a recent interview with its chief executive officer.

The budget airline, which flies to Tokyo's Haneda airport and Osaka's Kansai airport, has been growing its business in Japan since it launched flights from Kuala Lumpur to Tokyo in December 2010.

It recently identified Japan as one of its core markets and has established AirAsia Japan that will pave the way for it to operate both domestic and international flights from Japan.

''Japan has very big cities, a lot of Japanese like to travel overseas, Japan also has very attractive tourism assets, so people wantto visit Japan, that means there's two-way traffic, so that's why Japan is an opportunity,'' AirAsia X Chief Executive Officer Azran Osman-Rani said in a recent interview with Kyodo News in Singapore.

''Low-cost carriers are still new in Japan, so the growth opportunity is even bigger,'' he said.

When AirAsia X, the long-haul affiliate of AirAsia, first began flying to Japan, only about 25 percent of passengers were Japanese, while the other 75 percent were mainly Southeast Asians.

These days, however, the proportion of Japanese passengers at AirAsia X has almost doubled to 45 percent, he said.

''That means there's a greater degree of acceptance and word of mouth.

''Encouraged by the good response, it recently picked Japan as one of its core markets, along with Australasia, China, Taiwan and South Korea, as part of its realignment strategy.

The move to expand its operations in the region comes at a time of shrinking air travel market in Europe, which has been hit by the euro-zone crisis.

The airline recently said that it will up flights from Kuala Lumpur to Haneda airport from the current three times a week to six later this month.

Sometime in June, this will be increased to daily flights.

It is currently operating four times weekly flights to Kansai airport.

He said the airline plans to look at a third Japanese city by 2015.The airline announced last year that it has teamed up with Japan's ANA Group to form AirAsia Japan as the first low-cost carrier to be based at Narita airport, a move that will combine AirAsia's business model with ANA's in depth knowledge of the Japanese market.

It is part of AirAsia's overall strategy of forming hubs in important markets, also involving Thai AirAsia and Indonesia AirAsia which provide regional links.AirAsia Japan is expected to launch operations in August this year, operating out of Narita airport to domestic destinations in Japanand also international destinations.

It is expected to target domestic destinations such as Sapporo or Okinawa for a start.

AirAsia X's Japan operations went through some turbulence from March to June last year as a result of the March 11 earthquake and tsunami disaster in northeastern Japan.

However, the demand has since rebounded back to normal with two-way traffic consistently above 80 percent.

To cater to the needs of Japanese passengers, AirAsia X, whose fares are usually cheaper than conventional airlines, has recruited Japanese cabin crew on board its Japan-sector flights, provides announcements are in both Japanese and English and offer Japanese meals onboard.

''Japanese people are more affluent, if you are used to paying 20,000 yen for a taxi fare and for that same ticket you can get a six-or seven-hour flight''

''I think it will unlock a lot of demand for our services,'' he said.

Many of its passengers are young, newly married professionals with young children or young people who have just started working who are going on vacation.

The rapid transformation of Japan's aviation market with such developments as the expansion of Open Skies agreements, and Narita airport's plan to introduce a new terminal are expected to attract many low-cost carriers and foreign airlines.

He said he is undeterred by the entry of other low-cost airlines.

''The key thing for us is making sure that we still have the strongest brand in terms of brand awareness, we still have the biggest network in terms of destination and experience,'' he said.
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