More LCC subsidiaries to come

16.09.2006
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Centre for Asia Pacific Aviation notes that All Nippon Airways reportedly plans to establish up to two LCC subsidiaries next year to grow and defend international and domestic markets.

“This provides even more evidence that the LCC movement in this region is increasingly being fostered by full service carriers. The subsidiaries – in many cases intended to help carriers defend market shares – are increasingly viewed as effective market segmentation/branding tools, and cost reduction/restructuring vehicles,” stated Peter Harbison, Executive Chairman of the Centre for Asia Pacific Aviation.

“Independent new carrier entry (other than in India and China) has slowed in Asia in the past 18 months, due to weaker investor sentiment over high fuel and aircraft costs and intense competition in the sector,” noted the Mr Harbison.

ANA could join the ranks of full service carriers in this region with their own leisure-focussed low cost units. These already include Thai Airways, Air India, Qantas, Air New Zealand and Singapore Airlines. Elsewhere, Iberia’s Spanish LCC subsidiary, Clickair, is due to launch services next month, while Lufthansa is reportedly exploring establishing a Germanwings-style operation in Italy. In the Americas, the LCC subsidiary model has been less popular.

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