Second discount airline takes off in Japan

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TOKYO--Hokkaido International Airlines, Japan's second discount air carrier, started service on December 20 with flights between Tokyo and the northern city of Sapporo.

The airline, also called Air Do (pronounced "doe") joins Skymark Airlines as the first new carriers in Japan in 35 years. The two offer regular fares that are about 30% to 40% cheaper than the regular fares on the nation's big three carriers--All Nippon Airways, Japan Airlines and Japan Air System.

Air Do's one-way fare for the Tokyo-Sapporo route is $135, or 36% lower than the fares offered on the big three carriers.

The startup airline's first flight between Tokyo's Haneda airport and Shin Chitose airport near Sapporo was filled to capacity with 286 passengers. The airline is fully booked for its three daily round trip flights through the middle of January, airline officials say.

In order to reduce costs, Air Do has hired foreign pilots and reduced in-flight service.

Air Do is also backed by a number of businesses and private investors in Japan's main northern island of Hokkaido. The carrier is seen as helping boost tourism in the area, which has been hard hit by Japan's recession.

Air Do has not taken the route of Skymark for self-promotion. Skymark released a photobook of its stewardesses dressed in bathing suits. Air Do has strong support in its base of Hokkaido and has not indulged in splashy PR.

Skymark started service in September with flights between Tokyo and the southwestern city of Fukuoka. It has been running at about 80% capacity during its first few months in operation, a figure much higher than that of the big three carriers on the same route.

In response to the startup airlines, Japan's big three have cut fares for their flights from Tokyo to Fukuoka and Sapporo.

Copyright December 1998, Crain Communications Inc.

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