“This case shows that Japan’s low-cost carrier sector is only part way through its growth process, but the market has potential,” she said. “No countries have failed to succeed in this business. Japan is no exception.”
Even so, the upstart carriers face more rough air ahead as diplomatic tensions between Tokyo and neighbors China and South Korea weigh on travel demand between the regional rivals.
“The low-cost carriers cannot operate just with domestic flights alone. They must expand their revenue by mixing operations with international flights,” said Osuke Itazaki, senior analyst at SMBC Nikko Securities in Tokyo.
“It is the survival of the fittest and so many players cannot co-exist in the market,” Itazaki said.