All Nippon to Start Low-Cost Airline in Japan
By BETTINA WASSENER
Published: September 9, 2010
HONG KONG — All Nippon Airways stepped up its drive to become a leading Asian airline with the announcement Thursday that it planned to set up the first low-cost airline in Japan with the help of a major private equity firm based in Hong Kong.
The new carrier will take to the skies in the second half of next year and will fly both international and domestic short-haul routes out of Kansai International Airport in Osaka, ANA and its private equity partner, First Eastern Investment Group, said.
ANA has been emerging rapidly from the shadow of its main competitor, Japan Airlines, which has sought bankruptcy protection, and will hold 39 percent of the new carrier. First Eastern, a pioneer of direct investments in China, will have a one-third stake, and various Japanese investors will own the rest.
“Regardless of the intense competition in the air transportation industry, we anticipate an increase in passenger traffic demand in East Asia, and came to the conclusion that a low-cost carrier would be the right approach to compete effectively in this market,” Shinichiro Ito, the chief executive of ANA, said in a statement.
ANA and First Eastern are announcing the plans for their new, as yet unnamed, carrier just as global air traffic is recovering from the severe downturn that was brought on by the global economic crisis. Carriers around the world have been gradually reinstating the capacities they reduced as traffic collapsed last year, and are once again seeing robust passenger demand and cargo volumes.
Low-cost carriers have started to make inroads in the Asian market in recent years but have not done so thus far in Japan, where the market had been dominated by JAL and ANA.
ANA and First Eastern are aiming to stimulate additional demand for air service in Japan — whose economy is barely growing — by pricing tickets at levels that make them competitive with low-fare transportation providers like bus and train operators.-----
9 September 2010 Last updated at 10:10 GMT
Japan-China boat spat escalates
China has warned Japan that their wider relationship will suffer if Tokyo mishandles a dispute about a Chinese fishing boat seized in disputed waters.
China's foreign ministry said it was "absurd and illegal" for Japan to apply domestic law in "China's territory".
The captain of a Chinese trawler that collided with Japanese patrol vessels has been handed to prosecutors who will decide whether to charge him.
Tuesday's incident happened near disputed islands in the East China Sea.
There were no injuries, and the two Japanese vessels sustained minor damage.
The exchange of protests between China and Japan has something of the air of a ritual.
For now neither country seems to want to dramatise the incident.
But the episode illustrates the underlying tensions in the region where competing claims for small island territories reflect major strategic and economic issues.
Oil and gas rights could be valuable assets for the future.
But the continuing maritime tensions between China and its neighbours reflect a growing desire by the Chinese to pursue a more expansive naval strategy and to break out from the containment of the island chains that stretch from Japan to Taiwan and well into the South China Sea.
The uninhabited islands, known as Senkaku in Japan and Diaoyu in China, are controlled by Japan, but are also claimed by China and Taiwan.
Tokyo says the Chinese vessel collided with two Japanese patrol boats in two separate incidents, 40 minutes apart.
The captain of the fishing boat was arrested after repeatedly ignoring requests to leave the area, officials said.
China has demanded his release.
Chinese Foreign Ministry spokeswoman Jiang Yu described the move as "absurd, illegal and invalid, and China will never accept it".
Beijing has twice summoned Japan's ambassador and urged him to stop the "illegal interception" of Chinese fishing boats, and to release the boat and the crew detained onboard.
In recent years, Chinese activists have sailed to the islands on a number of occasions to assert China's territorial claims.Analysts say this latest incident is unlikely to disrupt Japan-China ties but it underscores the inevitable tensions as China's maritime ambitions grow