Mon, Jun 11, 2012 page12

• INTERVIEW: TransAsia plans to take on bigger rivals in region

  TransAsia Airways appointed industry veteran Keizaburo Yokota as the company’s president for Northeast Asia on May 1. With more than 30 years in the aviation business, Yokota recently shared his industry outlook and strategy to raise the company’s popularity in Japan and challenge larger regional rivals during an interview with ‘Taipei Times’ staff reporter Amy Su

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  Taipei Times (TT): What is your outlook for the airline industry?

  Keizaburo Yokota: Generally, I think industry sentiment will be unstable in the future, just as it was before, because the business of international air carriers is affected by all kinds of world events.

  Despite the recent drop in petroleum prices [the main cost for air carriers], the uneasy situation in the Middle East creates a risk that prices will rise again.

  

  Keizaburo Yokota, president of TransAsia’s Northeast Asia division, poses for a photo on May 1.

  Photo: CNA

  In the long-term, I expect oil prices to go up. The company has to expect that petroleum prices will go up at some point, and therefore it needs to keep its body [core business] healthy and efficient enough to make a profit even in bad times so it can stay operational.

  TT: What are TransAsia Airways Corp’s (復興航空, TNA) advantages in view of the economic uncertainties?

  Yokota: Compared with other carriers, we have a specific fundamental policy, which could make us a financially efficient airline. TransAsia chairman Vincent Lin (林明昇) gave us the goal of being a regional airline in Asia by running short-haul or medium-haul routes of no longer than four to five hours.

  Because of this strategy, the company’s business is relatively stable compared with the business situations of airlines operating long-haul services, because long-haul flights consume more [fuel] and suffer heavier losses when petroleum prices go up.

  TT: TransAsia is going to initiate its first regular route to Japan — between Taipei and Osaka — on June 28, in a first step toward entering the Northeast Asian market. What is your near-term plan?

  Yokota: Our priority is to develop and spread the network further.

  Thanks to the open skies policy, we plan to launch seven more regular routes by the end of this year, after inaugurating the route between Taipei and Osaka. Next year, we hope to initiate regular services to Tokyo.

  It is the best timing for Trans-Asia to initiate regular services to Japan, because the carrier has obtained a great deal of experience in the market by operating chartered flights.

  TransAsia launched chartered flight services to Japan in 2008, and operated more than 1,000 chartered flights to more than 30 cities in Japan — mainly in second-tier cities and airports — in 2010.

  TT: How do you plan to operate Japanese routes? Do you have any plans to expand TransAsia’s popularity to Japan?

  Yokota: Attracting Japanese customers will be very important. Currently, more than 60 percent of our passengers taking flights between Taiwan and Japan are Taiwanese.

  Since the air carrier offers mutual services, we will do our best to attract more Japanese customers for TransAsia, with the goal of making them account for 50 percent of the passengers between Taiwan and Japan.

  However, it will not be easy to increase TransAsia’s popularity in the short term, because four airlines — China Airlines Ltd (CAL, 中華航空), EVA Airways Corp (EVA, 長榮航空), Japan Airlines and All Nippon Airways — have dominated the market for a long time.

  Therefore, we have to let the market know more about TransAsia by building up the brand, encouraging passengers see TransAsia as a reliable airline and attracting their repeat business.

  Flexibility, on the other hand, may be a major weapon for TransAsia, as we will continue to run chartered flights to other destinations that don’t have regular routes in a bid to offer mixed service to customers.

  However, overall, if we hope to enter the Japanese market, we have to adopt a Japanese service mentality.

  TT: What is the Japanese service mentality?

  Yokota: Just like customers in other countries, Japanese customers look carefully at safety and good services. However, in Japan, I would say that it is important not to make drastic changes, because they usually find it hard to accept such things.

  We have to firmly synchronize flight safety and service quality to deal with Japanese customers, because they are very sensitive to services, hoping to experience something higher than their expectations.

  It will take time to build TransAsia’s popularity and reputation in Japan. My mission is to do it as early as possible to catch up with and exceed our peers amid severe competition.

  TT: How about TransAsia’s plan in South Korea, the other important market in Northeast Asia?

  Yokota: Launching a regular route between Taiwan and South Korea may not be so easy because of restrictions on aviation rights. However, it might be feasible to create a “triangle” concept to spread TransAsia’s coverage to South Korea.

  Currently, people in Taiwan usually visit Japan and go back to Taiwan. Why don’t we encourage them to visit South Korea from Japan and then come back to Taiwan from South Korea? Similarly, we could send more people from Japan to visit South Korea and Taiwan by offering them a triangular flight.

  In this case, we have to cooperate with other airlines that operate flights between Japan and South Korea through a code-sharing strategy, but this could be developed as a unique service offered by TransAsia.

  TT: Have you started to talk with other airlines about cooperation?

  Yokota: We are still considering it. This will be a step-by-step process for us, and we have to run Japanese routes smoothly as the first step in developing the market in Northeast Asia.

  TT: Facing the rise of low-cost carriers (LCC), how do you view their influence on the industry?

  Yokota: The prosperity of LCCs is good for the airline sector and these carriers helped expand total demand for airlines. While some customers of full-service airlines could switch to budget airlines, LCC customers might change their minds and choose full-service carriers at some point as well.

  In my opinion, although budget airlines in Asia have been growing and are still increasing, their numbers will reach a peak at some point.
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