AGAINST the backdrop of Peach Aviation, AirAsia Japan and Jetstar Japan launching flights this year, Tokyo’s Ibaraki Airport is eyeing a slice of the aviation pie.

According to Kazunori Katsutani, director of Airport Promotion from Ibaraki Prefectural Government, the airport is tring to convince Jin Air, Air Busan, T-way Airlines and Eastar Airlines from South Korea, as well as Cebu Pacific Air and AirPhil Express from the Philippines of its value proposition, and is “prepared to offer assistance to interested low-cost carriers”.

Ibaraki Airport is located 80km northeast of central Tokyo and is accessible via a limousine bus service, which costs 500 Japanese Yen (US$6.40) for a one-way trip. The area within a 100km radius of the airport boasts a catchment population of 19.8 million.

Besides having slots for most parts of the day except 12:30-13:30 hrs, the airport is able to offer savings for airlines through landing charges which are lower than those at Narita and Haneda Airports. Its single-storey terminal has complimentary parking facilities for up to 1,300 vehicles.

Airlines with existing operations at Ibaraki Airport include China’s Spring Airlines and Japan’s Skymark Airlines. Asiana Airlines’ service from Seoul is temporarily suspended due to last year’s earthquake and tsunami.

ASIAN low-cost carriers (LCC) have managed to grow their footprint significantly in the past decade, but there is room for them to expand their operations even further.

According to aircraft manufacturer Airbus, LCC’s in Asia-Pacific have an intra-regional market share (in terms of number of seats offered) of only 22 per cent, compared to their North American and Europen counterparts, which have 29 and 39 per cent shares in their respective markets.

All the signs – including a forecasted six-fold increase in the region’s middle-class population between now and 2030, as well as fast-rising income levels – point to greater penetration by LCCs in the future.

For Airbus, AirAsia and IndiGo are now its first- and third-ranked customers in terms of planes purchased. Five of Airbus’ top ten customers worldwide are LCCs. Whereas only six of the world’s top 100 airlines were LCCs in 2000 (in terms of Revenue Passenger Kilometre), this sector now accounts for 23 of the top 100 airlines globally.

At the moment, Japan is the emerging LCC market with three carriers set to make their debut this year – Peach Aviation, which will launch flights linking Osaka-Kansai to Fukuoka and Sapporo in March, as well as AirAsia Japan and Jetstar Japan.

JAPAN’s first-ever pure low-cost carrier (LCC), Peach Aviation, is set to kick-off operations on March 1, inaugurating four daily flights from Osaka-Kansai Airport to Sapporo, and three daily flights from Osaka-Kansai to Fukuoka (TTG Asia e-Daily, August 25, 2011).

Peach Aviation CEO, Shinichi Inoue, promised that the airline would be “cute and nice”—reflected in the pink uniform its cabin crew will don. The carrier has also promised to inject a dose of Kansai humour during cabin announcements—an apparent reference to the Kansai people’s penchant for joking around.

The challenge for Peach in the run-up to the launch will be to educate the Japanese public about the need to pay for various ancillary services, and managing expectations from travellers accustomed to full-service carriers.

In admitting that the pure LCC model – selling point-to-point routes on one-class travel, using simple fares, no codesharing, operating a single aircraft type – was slow to enter the Japanese market, Inoue noted that he first became acquainted with the concept during a Terrapinn Low Cost Airlines conference back in 2008.

All Nippon Airways owns a 38.67 percent share in Peach, which is planning to launch additional routes to Nagasaki in March, Kagoshima in April, and Seoul (Incheon) in May.

AIRLINES and hoteliers are starting to sit up and take notice of Myanmar, which is expected to see an upsurge in leisure and business arrival numbers as it emerges from fifty years of military rule.

Regional low-cost carriers such as SilkAir, AirAsia and Jetstar are, as outlined by Brendan Sorbie, chief representative South-east Asia, Centre of Asia-Pacific Aviation, poised to become the main beneficiaries of political changes transforming the country.

“It’s still early days yet, but given the size of Myanmar’s population and low GDP per head, it is apparent that the potential for outbound travel utilising low-cost carriers is immense, once the economy starts to lift,” he said. “With the ASEAN open skies agreement set to take effect in 2015, Myanmar will also see an influx of arrivals.

“It’s the next huge growth market for (low-cost) aviation.”

Thai AirAsia is believed to be eyeing new routes to Myanmar, while SilkAir and Singapore Airlines are looking to fly to other cities besides the capital Yangon, according to SilkAir planning manager, Joel Goh.

“SilkAir and Singapore Airlines believe there is excellent potential for growth in Myanmar, particularly in Mandalay,” he said. “The political situation does not faze us – we’ve been operating in Myanmar since the early 1990s. Poor internal infrastructure such as lack of airport capacity outside of main cities and poorly maintained roads pose a bigger impediment to growth than politics.”

Some major hotel operators, including Starwood and Marriott have already announced their intention to open properties in Myanmar. However, hotel operators whom TTG Asia e-Daily spoke to were not as enthused.

Chetan Patel, vice-president e-commerce, Onyx Hospitality Group, said: “Even though we are thinking of developing properties in Myanmar two to three years down the road, the infrastructure as well as the political situation pose a significant challenge and could possibly derail our plans.”

“Myanmar shows a lot of hotel development potential, especially in its untouched coastal areas,” said Qin Shen, VP sales & marketing, Club Med Asia-Pacific. “However, we are not prepared to invest in Myanmar in the immediate term, as the political situation is still in flux, and accessibility to regions outside the capital is poor and patchy.”

PATA was engaged by the Myanmar government last December to lead a taskforce and carve a tourism blueprint for the country. A team, led by former interim PATA CEO Bill Calderwood, will conduct an appraisal of existing tourism infrastructure later this year.

SWISSÔTEL Le Concorde Bangkok is to embark on a 345-million Thai baht (US$11.1 million) upgrading, and will be repositioned as a MICE hotel to serve the burgeoning business meetings and conventions market in Bangkok’s Huay Kwang district.

The 407-key property will fork out 45 million Thai baht on renovating its F&B outlets from April-July, and 300 million baht on renovating its rooms, to be completed by the second half of next year.

“The time is entirely right for this repositioning,” said the hotel’s general manager, Marcel Sawyere. “The whole business dynamics of the area are changing, and Swissôtel Le Concorde Bangkok is determined to maintain its position as the leading property in the area.”

“This initiative is designed to attract a wider and a more diversified clientele. We want to grow our business from all sectors and especially to develop business from new and emerging markets,” he added.

Meanwhile, Le Concorde Hotel, owner of Swissotel Le Concorde Bangkok, has been busy acquiring land in a number of beach resort destinations, and has allocated a two billion Thai baht budget to build two upscale projects in Pattaya/Jomtien and Trad.

Construction on the 300-key Pattaya/Jomtien property will start this October, with a planned opening in second quarter 2014. Primary target markets include Russians, Europeans and Thais.

Scheduled to open after the Pattaya property, the Trad property will initially have 70 keys and be located on its own beach just three kilometres from the Cambodian border.

As part of its five-year expansion strategy, Le Concorde Hotel will also be developing upscale properties in Chiang Mai, Hua Hin and Phuket.

THE MACAU Government Tourist Office (MGTO) has launched an Incentive Travel Stimulation Program, an extension of its Strategic MICE Market Stimulation Program introduced in May 2009.

The programme, running from January to December 2012, will provide additional benefits for incentive groups with over 50 non-local participants staying in Macau hotels for more than two consecutive nights.

MGTO will offer subsidies of up to MOP$300 (US$37.50) for each non-local participant, as well as provide complimentary tourism information kits, welcome gifts, a promotional Macau video, and free admission to the Wine Museum and Grand Prix Museum.

In order to qualify, events have to be confirmed by December 31, 2012. Applications will undergo a pre-qualification screening by MGTO.

Meanwhile, the latest figures from Macau’s Statistics and Census Service Department revealed that 236 MICE events were held in the territory in third quarter 2011, an 87-per cent year-on-year decrease. In contrast, participant and attendee numbers registered a 39-per cent year-on-year jump in the third quarter, to a total of 507,661.

During the first three quarters of 2011, the number of MICE events in Macau decreased to 771, from 1019 during the same period in 2010. The average duration of events also dropped by 0.2 days to 2.1 days. Attendee and participant numbers totalled 755,324 for the period January – September 2011, a 29 per cent hike over the same period the year before.

Reporting by Deborah Cornfield