TokyoTomo Travel Guide

At a session meeting of JATA Management Forum 2011 hosted by Japan Association of Travel Agents (JATA) on February 15, a panel discussion was held under the subject of “LCCs’ Presence in Our Market – Can Travel Agencies Coexist Peacefully with Them?” Shoichi Gonda, executive officer of Kinki Nippon Tourist, moderated the debate, and the participating panelists were: Bobby A. Haque, executive vice president, Global Procurement at H.I.S.; Masaru Kataoka, regional general manager of Jetstar Airways; and Dong Shil Hyun, senior executive vice president, Regional Headquarters Japan at Asiana Airlines.

During the course of discussion, Haque argued, “Low-cost carriers (LCCs) pose a threat to many travel agencies, but nobody can stop their moves. What is left with travel agencies as an option is how best we can diminish the threat and turn it into opportunities.” He then explained that his company, H.I.S., is trying to strengthen partnership with carriers to ride out the crisis. Meanwhile, he pointed out the problems entailed in merchandizing the LCC seats into package tours because the cancellation charge clause contained in the Provisions to Travel Agency Law is not compatible with the actual business practice. He claims, therefore, changes of business scheme, including amendments of the Provisions, would be inevitable for travel agencies. “It will become impermissible sooner or later for us to hold a bunch of air seats at our disposal up until one month before departure, and then return unsold seats to the airlines with no indemnity,” he added.

Two panelists representing airlines discussed relationship with travel agencies from two different standpoints. Although it is widely acknowledged that LCCs are basically oriented toward direct retailing of their seats, Kataoka of Jetstar asserted that Jetstar has never tried, specifically in the Japanese market, to increase a proportion of direct retailing against indirect sales. As a matter of fact, seats for groups and package tours are something that airlines find hard to sell. The airline’s basic stance, therefore, is to offer seats to meet diverse uses, he continued. Hyun of Asiana disclosed that the proportion of direct sales of Air Busan – a group airline of Asiana – stays at 54 or 55 percent in the Korean market and no more than 40 percent when limited to international flights. “We are mixing and matching our direct sales with indirect sales coming from travel agencies to gain the maximum yield,” he commented, suggesting a viability of mutually beneficial relationship between airlines and travel agencies.

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.

A further expansion of the open skies deregulation agreement was reached after Japanese and South Korean aviation officials met in Tokyo on December 21 and 22, 2010. The two countries had already agreed on the open skies deregulation with the exception of operating to/from the Tokyo metropolitan area. As the upper limit of aircraft take-off and landing slots at Tokyo’s Narita Airport is slated to be increased to 270,000 in summer 2013, Japan is set to realize the open skies deregulation including services to/from Narita Airport. Should a phased increase of the slots become feasible before the summer 2013, the agreement states, it could allow both countries to accelerate part of the planned increase of flights and routes that include new entries of low-cost carriers (LCC).

The open skies deregulation including the Tokyo metropolitan airports was first agreed and implemented between Japan and the United States. Japan now started negotiations with countries in Asia. The open skies agreement with South Korea this time is the first accord among the Asian countries. Japan is set to hold aviation talks with Singapore and Malaysia in January and February this year respectively in a bid to conclude an open skies deregulation agreement. In the future, Tokyo’s Narita Airport will further beef up its operating facilities and enhance the aircraft noise-abatement measures allowing for additional aircraft landing and take-off slots. The new agreement between Japan and South Korea will then allow the respective airlines to freely introduce new routes and increase the number of flights subject to the Korean government approval. This is regardless of destinations, the number of frequencies and the number of airlines.

With regards to Tokyo’s Haneda Airport, it is excluded from the open skies agreement this time as aircraft take-off and landing slots still remain restricted at Haneda.

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.

4travel recently conducted a survey on its website about “Use of Low-Cost Carriers (LCC)” targeting the site users. According to the survey, 28.8 percent of the respondents replied “Definitely want to use LCCs” and 43.4 percent responded “Want to use LCCs.” With these replies included, it revealed that 72.2 percent of those surveyed intend to fly by LCCs. Asked to give reasons, those who replied “Definitely want to use LCCs” answered “Want the cheapest possible price” and “Prefer cheaper price,” emphasizing the price as a key priority, while those who responded “Want to use LCCs” said “Yes, if it is safe to fly” and “Want to fly once to see if comfortable enough,” assuming no problems for safety and service aspects.

On the other hand, 25.0 percent of those surveyed answered “Do not want to fly LCCs” and 2.8 percent responded “Definitely not.” Many of the reasons given indicated “Concerns about safety and reliability.” Among other reasons are “No mileage program available,” “Would like comfort in flying” and “Do not want any discomfort even if only a means of transportation,” as some travelers seem to consider a flight as part of a pleasure in traveling.

Decisive factors in selecting an airline is “price” (46.4%, highest), followed by “reliability” (24.8%), “mileage program” (22.1%) and “in-flight service” (4.0%). Those respondents, who regard “price” as a crucial advantage, take into consideration also “flight safety and service aspect,” thus paying attention to the cost performance when it comes to selecting an airline.

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.