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Tue, May 16, 2006 - Page 10 News List

Japanese airline mulls launching low-cost carriers

AFP , TOKYO

All Nippon Airways (ANA), Japan's second-largest airline, said yesterday it is considering launching low-cost carriers to prepare for expansion at Tokyo's clogged domestic airport.

Budget carriers have proliferated across Asia but barely taken off in Japan, owing to the high airport landing fees and the already dense route network by ANA and its embattled rival Japan Airlines (JAL).

"Launching budget airlines is within our sight," an ANA spokeswoman said.

The Financial Times reported yesterday that ANA planned to launch low-cost domestic and international airlines by 2009. The international airline would focus on China and South Korea, which Japanese carriers see as growth markets.

The Japanese business daily Nihon Keizai Shimbun in January also reported the ANA budget carrier plan.

The 2009 target would coincide with the opening of a new runway at Haneda, the domestic gateway to Tokyo which is the busiest airport in Asia.

"In 2009, competition will increase and low-cost carriers, particularly from elsewhere in Asia, will start flying into Tokyo. We have to be well prepared for it," ANA chief executive Mineo Yamamoto told the Financial Times.

The ANA spokeswoman said the budget carrier plan was not definite.

"We have to examine the plan from now on but nothing official has been decided yet," she said.

Home-grown budget airlines have already limited domestic service, including Skymark Airlines Co which in February slashed fares on some of its routes in Japan by another 50 percent.

The launch of budget carriers would be another step up for ANA in its rivalry with JAL, which has been stung by a series of safety scares. Both Japanese airlines have seen their bottom line suffer due to high oil costs.

JAL plunged into the red in the financial year to March, although it expects to return to profit this year.

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