Airbus eyes Japan's budget carriers

8th December 2011, Comments 0 comments

European aircraft giant Airbus said Thursday it was targeting Japan's fledgling low-cost airlines to boost its business in the country, ratcheting up a battle for market share with rival Boeing.

"In the short term, this (strategy) could let us significantly increase our market share," Stephane Ginoux, chief executive of Airbus' Japanese unit, told AFP after a news briefing in Tokyo.

"Within two years, we can see significant results because the low-cost airline model is undergoing a rapid rise, with lots of aeroplanes."

The aircraft maker said it was still looking to break Boeing's near monopoly with established carriers All Nippon Airways (ANA) and Japan Airlines (JAL), noting it could supply new parts to their ageing fleets.

Japan's handful of new budget airlines control just five percent of the aviation market -- far less than low-cost carriers in the United States and Europe where they hold a 29 percent and 35 percent share respectively.

But the new entrants -- mainly joint ventures between big Japanese airlines and overseas partners -- are hoping to capitalise on rising demand as the economy recovers from the March 11 quake and tsunami.

Japan will need almost 600 new planes over the next 20 years, with new operators likely to account for about half of those orders, said Kiran Rao, executive vice president of sales and marketing at Airbus.

"The low-cost airlines in Japan will not take away market share from the established airlines, but they'll create a new market from people who don't fly right now," Rao said.

Budget carriers Peach and JetStar Japan have decided to use the Airbus A320, while established carrier Skymark Airlines has ordered six wide-body A380 aircraft as it looks to take on ANA and JAL in the lucrative international market.

Airbus said on Tuesday that it had booked 1,378 orders between January and the end of November, confirming it was headed for a record year despite the cancellation of some orders for its A380 superjumbo airliners.

© 2011 AFP

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