In February, Japan Airlines Corp. surprised the industry by announcing it would replace its super-seat luxury class, which had been in place for 18 years, with a new, cheaper class on domestic flights.
Meanwhile, archrival All Nippon Airways Co. said it would take the opposite course by expanding its super-seat services on domestic flights.
Both companies have stated it is the first time they are traveling in opposite directions in terms of services.
And progress seems to be smooth on all fronts, with both carriers meeting passengers’ needs.
Upgrading from economy class to the new class launched by JAL in June only costs 1,000 yen. Class J features slightly smaller seats than super seats, with customers served blankets, headphones, herbal tea and soft drinks.
The former super-seat service involved upgrades of 3,200 yen to 4,200 yen. Its services included exclusive check-in counters, meals and alcohol.
In the four months through September, Class J enjoyed an average load factor of 85 percent of capacity, way beyond the initial target of 75 percent. About 90 percent of Class J customers were individual passengers, as opposed to group travelers, according to the nation’s largest carrier.
JAL expects the new class to boost its sales by 5 billion yen between last June and next March.
“We believe that the popularity has partly been supported by independent travelers who switched from ANA’s economy class,” said Kunio Hirata, JAL vice president in charge of domestic flight marketing.
As a temporary service through the end of October, JAL serves either a can of beer or light refreshments to Class J passengers. This is considered another factor behind its popularity.
JAL was created through a merger between Japan Airlines Co. and Japan Air System Co. in October 2002. The carrier now divides the domestic market with ANA.
Hirata said JAL regarded the merger as an opportunity to review its domestic flight services to meet changing passenger needs.
Topping the list of needs among business travelers was a large seat with a cheaper upgrade rate of about 1,000 yen, a company survey found. Given that domestic flights last one to two hours, passengers prefer no-frills service, Hirata said.
Hence the new lower-priced seating class with a greater number of seats to ensure broad customer appeal, he said.
But JAL admitted that some of its super-seat passengers who favored the old service have switched to ANA.
The load factor for ANA’s super-seat class, which was reinforced in April, jumped 12 points that month from a year earlier and has been higher than the previous year for the past six months.
“After JAL announced the launch of Class J, we received a lot of inquiries from customers asking us to retain our super-seat class,” said Koichiro Akahori of ANA’s marketing sector, noting that the figures show solid demand for high-end services.
ANA has been offering super-seat services since 1985. It costs between 3,200 yen and 6,000 yen more than economy class.
To counter Class J, ANA added new services — such as providing a steamed towel and slippers — for super-seat passengers.
ANA now plans to increase the number of seats for the super-seat class and add other services, including the expansion of food menus in December. The carrier expects the planned expansion to generate 5 billion yen in sales in fiscal 2005.
Akahori said the carrier hopes to raise the load factor to levels around 80 percent by stealing more JAL passengers dissatisfied with its new Class J seats.
Hajime Hitotsuyanagi, a transport industry analyst at Daiwa Institute of Research Ltd., said both companies’ strategies have been successful because they are targeting a different customer segment.
“There was a huge gap in prices and services between super-seat class and economy class,” and Class J has cultivated a new market by appealing to those in between, Hitotsuyanagi said.
On the other hand, JAL’s move has boosted the number of passengers for ANA’s super seats since ANA has become the dominant player in the upscale segment, Hitotsuyanagi said.
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