Will we see the birth of another mega-transporter in Asia? Visit Asian governments and their obsession with keeping their hermetic borders are decimating air transport in the region. And forcing new survival strategies.
This is confirmed by AAPA, the Association of Asia-Pacific Airlines. It has just published its members' activity figures for October. And it's a disaster. The region's airlines recorded only 1.5 million international passengers. Barely 4.9% of what they carried in October 2019 (31.3 million passengers). Seat capacity stood at 12.7% of October 2019 capacity. Load factor on international flights reached an average of 30%.
Japan is no exception to the prevailing gloom. Especially since a new wave of covid-19 has hit the country. Between 31 October and 2 December, the number of positive cases rose from 100,392 to 148,694, and the number of deaths from 1,755 to 2,139. The outlook therefore remains bleak for the two international airlines, which are All Nippon Airways and Japan Airlines.
A Japanese-style fusion?
So, following the example of what has just happened in Korea -with the announced merger of Korean Air and Asiana - the Japanese government is considering the creation of a single airline comprising ANA and JAL.
The idea of merging the two carriers came from Heizo Takenaka, a former minister and adviser to Prime Minister Yoshihide Suga. He believes that the logical consequence of a government bail-out of the two carriers would be a merger. Especially as public money is involved.
If there were a merger, it would create a new mega-carrier on the continent, with over 100 million passengers.
The other side of the coin: it would encourage the creation of a huge monopoly - particularly on international routes departing from the Japanese archipelago.
And this is where any merger could run into trouble. With more than 127 million inhabitants and 20 million international travellers in 2019, the coexistence of two Japanese airlines is not an absurdity. The market is large enough to support two national carriers.
Especially as the two carriers have conflicting financial interests, with different shareholdings. As a result, no decision has yet been taken and the idea has only been launched unofficially. Moreover, we cannot expect any major decision from the Japanese government before 2021 - at the very least. By then, air traffic may have recovered a little...
