While the entry of new airlines two years ago accelerated industry competition in Japan, fares are likely to drop further as full deregulation is introduced today.
The revised Civil Aeronautics Law will eliminate regulations on domestic air fares. As a result, domestic airlines will be given a free hand in deciding their fares, routes and flight frequency.
Aviation deregulation in Japan accelerated in the early 1990s as part of efforts to revitalize the economy. However, the domestic market's de facto monopoly by All Nippon Airways, Japan Airlines and Japan Air System limited the lowering of air fares.