Journal of Japan Society of Civil Engineers, Ser. D3 (Infrastructure Planning and Management)
Online ISSN : 2185-6540
ISSN-L : 2185-6540
Infrastructure Planning and Management Vol.31 (Special Issue)
LOW COST CARRIER ENTRY SHOCK ON AIR PASSENGER DEMAND AND AIRLINE RIVALRY
Tomoki ISHIKURAKohei YAMAMOTOHiroyuki ONEYAMA
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2014 Volume 70 Issue 5 Pages I_701-I_707

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Abstract
In 2012, new LCCs have entered into Japanese domestic air transport market. All of the new LCCs; Peach, Jetstar Japan and Air Asia Japan are partially subsidized companies of existing FSAs. The air fare of the new LCCs are significantly lower than the legacy FSAs. This impact caused the increase of OD demand, however the FSAs might lose demand (cannibalization). It is the first experience in Japan that this kind of price shock takes place in domestic air market.
This paper analyzes the above effects in air demand quantitatively in Osaka (KIX)-Sapporo (CTS) market. We assume the situation that the new LCCs do not enter, and estimate short run air demand trend by means of time series analysis. Then the comparison of the estimated demand and the actual air demand by airline decomposes the change in air demand into competitive effects and demand inducing effects.
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© 2014 Japan Society of Civil Engineers
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