To revive tourism, JAL is set to make China-focused LCC

Monday, April 26, 2021

The plans of Japan Airlines to make Spring Airlines Japan, a low-cost carrier partially funded by the Spring Airlines of China, a consolidated subsidiary by the end of June, Nikkei has learned.

JAL, one of the two important airlines of Japan along with All Nippon Airways, will make an added investment of several billion yen to obtain a majority stake in Spring Airlines Japan. It will fortify the relationship with the LCC, which has a powerful and huge customer network in China, waiting eagerly for a revival in tourism demand and visits to acquaintances after the pandemic.

Spring Airlines Japan was set up in 2012. It’s operating out of the city of Narita, east of Tokyo, with investment from Spring Airlines and other companies. At present, JAL holds a small stake in it.

Spring Airlines Japan operates flights to three domestic airports: New Chitose Airport in Hokkaido, Hiroshima Airport and Saga Airport. Also, its flights functions to cities in China like Tianjin and Harbin. Its main power lies in the huge and expansive customer base of Shanghai Spring International Travel Services, the parent company of Spring Airlines.

There is a probability mounting that business demand in airlines will get smaller as online meetings have paved the way in the corporate sector during this crisis situation. However, the main business of LCCs is tourism and their significance is thus rising on a relative basis.

The plan by JAL to lift up its stake in Spring Airlines Japan comes as the industry is working to make their LCC businesses stronger in anticipation of a post-pandemic recovery in demand for tourism.

JAL began operating Zip Air Tokyo in 2020. Also, ANA Holdings is expanding the flight network of Peach Aviation and has proposals to introduce a new brand for low-cost international flights to Asia and other regions by fiscal year 2022.

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