Research Trends and Results

Research on the possibility of new domestic airline
route by downsizing of aircraft and LCC.
HATANO Takumi, International Maritime Policy Analyst
Airport Research Department(Keywords Domestic airline, cost analysis, LCC, Small aircraft)

１．The purpose and overview of this study
In our domestic air transport, our aircraft wasbigger compare to Europe and America, but lately
air carriers have phased in so-called regional jets
which have less than a hundred passengers.
Meanwhile, new air carriers so-called low costcarriers (LCC) that feature low-cost have beenexpanding their business in Southeast Asia. In 2012,
three companies that are full-scale LCC havesuccessively started service in Japan.
Based on the situation surrounding air transport, thisis a consideration regarding the formation
possibility of new airline routes by downsizing
aircrafts and price reduction.
２． Cost analysis of domestic air carrier
Regarding domestic air carrier cost, we calculated
the cost per flight for flight distance for one modelof aircraft, and it's based on the information of an aircarrier that publishes a full detail of the cost as IR.
Also, we ran the numbers on the cost level of using
small aircraft from the comparison of a unit cost perseat and km and indicated the results in chart 1.

level for small craft, and it was calculated as 70% of
the present for LCC. Load factor (LF) andassumed freight revenues are estimated for theassumed demand. The results are indicated in chart
2. Based on the results, routes that have airline
formation possibilities are indicated in chart 1.

Draw 2 LF and balance of payments (forsmall aircraft)
Chart 1 Routes that have airline routeformation possibilities.
Airlines that are considered as airline
formation possibility by using small aircrafts

Matsumito-Naha
Kansai-Obihiro
Sendai-Asahikawa
Narita-Hanamaki
Narita-Niigata
Narita-Miyazaki

Draw1 Estimated cost (Yen) by flight distance(Km)
３． Demand analysis and consideration of new
airline formation possibility
For demand analysis that is preconditioned for theairline formation possibility, a demand forecastingmodel that was developed by The National Institutefor Land and Infrastructure Management (NILIM)
was used. For basic data, such as economy, anindex of 2011 was used. About 45 routes that aresubject for this, the numbers are run for two flights
per a day that is the most convenient times as anideal condition.
Regarding airfare level, it is just about the present

Chitose-Miyazaki
Sendai-Tokushima
Chubu-Kushiro
Niigata-Okayama
Kitakyushu-Sendai
Sendai-Matsumoto
Narita-Kagoshima

Airlines
thatareconsidered as airline
formation possibility
by LCC
Sendai-Tokushima
Kansai-Obihiro
Chubu-Kushiro
Sendai-Asahikawa
Narita-Kagoshima
Narita-Hanamaki

４． Challenges for the future
Change of a situation around airline industry is sofast. The three full-scale LCC companies actuallypresent lower rates than this supposition. Each LCC
plans to expand its aircrafts, so follow-up for thesituation will be needed in the future.
【Reference】
1)
TECHNICAL NOTE of NILIM No.698
http://www.nilim.go.jp/lab/bcg/siryou/tnn/tnn0698.
Airlines that are considered as airline formation
possibility by using small aircraft
Airlines that are considered as airline formation
possibility by LCC