13：45～14：20

Low Cost Carriers and Transport Network Efficiency(格安航空（LCC）の都市間交通ネットワーク効率への影響に関する研究)
TIRTOM Huseyin 研究員

１．Background and Objective
In comparison to full service carriers (FSC), lowcost carriers (LCC) provide low ticket fares withfewer comforts. LCC gained high growth rates inrecent years around the world and achieved around
25% share of global air traffic. In Japan, LCC are
regarded as means to stimulate air travel, increase
tourist numbers and improve regional economy.
Therefore, Japanese Government, airport managers
and local governments support LCC development.
Although LCC entry to Japan was as late as 2012,
they quickly gained around 9% domestic market
share, thanks to the above mentioned favorableenvironment.
LCC can be good for people as they provide
cheaper services and more accessibility, but theyalso pose a threat to other operators. Studies from
Europe indicates that, LCC grow using secondaryroutes, avoiding direct competition with FSC at
first, but then after gaining a strong market position
they start to compete with FSC using major airports
as well. Due to their cost advantage, LCC can draw
significant amount of passengers from FSC andhigh speed railways (HSR), endangering theirprofitability. Moreover, FSC may withdraw from
unprofitable regional routes, if they cannot gain
enough profit from lucrative lines due to the fiercecompetition.
In order to take correct policy measures, it isnecessary to estimate positive and negative impacts
of LCC growth on people, environment and otheroperators considering whole network. There aremany existing behavioral studies that estimate
LCC-FSC competition on specific routes basis.
Unlike them, this study will try to analyze whatwould happen on the country scale, if LCC could
reach a significant market share.
２．Methodology
This study intends to analyze hypotheticalsituations in which LCC gain 15% (for normalgrowth) and 25% (for fast growth) domestic market
share on the network of 22 major airports. In orderto do that; first, LCC growth scenarios will be
prepared by increasing LCC flight numbers on
current destinations while keeping FSC flightnumbers constant. Next, OD demand will be
estimated based on new frequencies using a gravity

model. Then, network simulation will be carriedout using a multimodal planning model to findroute choice and modal distribution of OD traffic.
Finally, network analysis will be performed tocalculate several indicators such as average travel
time, average user cost, operators` profit, modal
share and CO 2 emissions to measure benefits andcosts of LCC growth on people, environment, otheroperators and network efficiency. Moreover, inorder to assess importance of slot distribution
policy at congested airports, two situations will beconsidered in scenario set up: 1) priority will begiven to LCC; 2) priority will be given to FSC.

Figure-1 Methodology of the study.
3． Conclusion
Currently, this study is in initial phase. But after
completion, I expect to get answers to following
questions:
1- How much benefit will people gain if LCC
reach 15% (25%) domestic market share?
2- How LCC growth will affect CO 2emissions?
3- How much revenue will be lost for FSC andHSR?
4- How slot distribution policy in congested
airports can affect LCC growth?
I will explain objective and methodology indetail at the seminar and provide a numericalexample on a small-scale network.

(C)Dr. TIRTOM Huseyin, Institute for Transport Policy Studies, 2015