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The economic impact of the entry of LCCs on the local economies（Report No.122）
Summary
The summary of this report is as follows:
① The expectation of the entry of LCCs (Low Cost Carriers), which induce demand through low cost and low fare, into low demand routes bound for local cities
・ At the end of 2014, the number of flights on local routes operated by LCCs reached 2,204 flights per month, which accounted for approx. 43% of all LCC flights.
・ Out of 69 routes which FSCs (Full Service Carriers) withdrew from in the 2000s, 6 routes were resumed by LCCs.
・ The difference of average lowest air fare between FSCs and LCCs on the local routes was larger than that on trunk routes.
② The analysis of the results of a questionnaire targeting LCC passengers at 3 airports: New Chitose, Matsuyama and Oita
・ The proportion of visitors to local airports was higher in LCCs than in FSCs: the percentage was about 70% in LCCs, against 60% in FSCs.
・ 16.2% to 18% of LCC passengers was new demand induced by LCCs, and the ratios of 3 airports were not largely different.
・ The travel consumption of passengers who would have selected FSC flights when LCC flights were not available, was higher than that of passengers who would have canceled their travel.
③ The economic impact of the entry of LCCs at three airports: New Chitose, Matsuyama and Oita
・ Launching of LCC service caused a considerable economic impact on the local economies.
・ The impact on Hokkaido prefecture of the induced demand of LCCs at New Chitose airport: approx. 7 billion yen per year
・ The impact on Ehime prefecture of the induced demand of LCCs at Matsuyama airport: approx. 770 million yen per year.
・ The impact on Oita prefecture of the induced demand of LCCs at Oita airport: approx. 960 million yen per year
④ The economic impact of foreign passengers on international LCCs.
・ The impact on Ibaraki prefecture of foreign passengers on LCCs at Ibaraki airport: approx. 530 million yen per year.
・ The impact on Kagawa prefecture of foreign passengers on LCCs at Takamastu airport: approx. 370 million yen per year.
⑤ The interview survey in local cities and airports
・ Launching of LCC service led to the expansion of new customer segments such as individual and young customers as well as to the increase of the number of visitors.
・ Individual and young customers preferred to stay at small accommodations such as guest houses and local inns but not at major hotels. In addition, they preferred local shopping streets and local eateries where tourists of package tours do not stop over. These were significant in Amami Oshima.
・ It is necessary to enhance the capacity of accepting individual and young customers in the areas where an airport with LCC services is located.
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