An Analysis on the Impact of LCC Entry into the Domestic Aviation Services in Japan

Abstract

This paper developed a method of simulating air transport demand changes when low cost carriers (LCCs) entry into the domestic aviation services based on Bertrand Nash Equilibrium. Consequently, we analyzed the changes in passenger demands, average flight fares and the number of flights on three major routes: capital region to Kansai area, capital region to North Kyushu area, and Kansai area to North Kyushu area. The changes are estimated to be significantly different among the routes.