Low-cost airline Peach eyes rebound in Chinese tour group visits to Japan

Osaka-based low-cost carrier still eyeing the rebound in Chinese tour groups visiting Japan

PUBLISHED : Saturday, 13 July, 2013, 12:00am
UPDATED : Saturday, 13 July, 2013, 6:07am

Peach Aviation, a low-cost carrier based in Osaka, remains cautious about expanding into China even amid signs of a recovery in Chinese leisure travel to Japan.

Shinichi Inoue, the chief executive of the airline that began operations in Hong Kong in May, said the carrier had not yet gained approval from the Chinese authorities to fly to Shanghai.

The number of tour groups to Japan has probably fallen 90 per cent since the crisis. Chinese travel agencies were told not to organise tours. That was a big hit

The number of Japanese-bound Chinese travellers has fallen sharply since August last year, when a territorial dispute between the two countries escalated and sparked a nationwide boycott of Japanese goods and hurt tourism.

Although business travel between the two countries resumed shortly after the incident, leisure travel - especially involving tour groups - had more than halved and not recovered, said Peach's agent in Hong Kong, Pacific Aviation Marketing.

"The number of tour groups to Japan has probably fallen 90 per cent since the crisis," said Eddy Sat, the company's managing director. "Chinese travel agencies were told not to organise tours. That was a big hit, because tour groups made up half of all leisure travel from China to Japan."

But major travel agencies in China said tour groups to Japan were starting again.

"It was true that we didn't operate any Japan tour earlier this year, but we started running them again in May," a saleswoman from Guangzhou-based GZL International Travel told the South China Morning Post.

Beijing China International Travel Service said it started organising tour groups to Japan again two months ago.

A spokeswoman for Peach said the firm wanted to be sure the recovery was for the long term. "Demand from Hong Kong is so much we barely have enough capacity to cope, so we want to make sure that the demand is there before we open a new route," she said.

Peach's daily service between Hong Kong and Osaka has carried 2.4 million passengers since July last year, with an average of 85 per cent of seats filled.

The airline will add flights every weekend during September and October, to cope with increased demand from students returning to school.

Peach will receive its 10th aircraft next month but continue to limit its network to a four-hour flying zone, in order to maximise resources. Inoue said the fleet would increase to 17 by 2015.

The carrier also plans to start a service between Hong Kong and Okinawa.

In light of competition from Hong Kong Express Airways - which will become a budget carrier in October - and Jetstar Hong Kong - which may begin operations in the city at the end of the year - Peach said it would not compete just on prices: it will launch themed flights.


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