Fwd: Japanese railway companies work to keep riders from airlines

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--- In BATN@xxxxxxxxxxxxxxx, "2/17 Ashai Shimbun" <batn@...> wrote:

Published Friday, February 17, 2006, by The Asahi Shimbun

JR railways work together to keep riders from airlines

By Yasufumi Kado
The Asahi Shimbun

New airports in Kobe and Kita-Kyushu have prompted two Japan Railway 
companies to work together to better compete with airlines. 

Central Japan Railway Co. (JR Tokai) and West Japan Railway Co.
(JR West) will increase the number of Shinkansen bullet trains 
linking Tokyo with Shin-Kobe and Hakata, near Kita-Kyushu, under
new timetables starting March 18. 

JR Tokai, which operates the Tokaido Shinkansen line between Tokyo 
and Shin-Osaka, expanded the coverage of its online discount 
reservation system to Shin-Kobe in December and will further extend 
it to Hakata by summer. 

"Kobe and Kita-Kyushu are major cities," a senior JR West official 
said. "We cannot just sit back and watch (airlines) take over (the 
key markets)." 

Kobe Airport opened on Thursday, and New Kitakyushu Airport will 
replace the existing one on March 16. 

Trains, no match for airplanes in terms of speed, are facing greater 
competition on price and services as well. 

Skymark Airlines Co. links Kobe Airport with Tokyo International 
Airport at Haneda in 70 minutes for a regular fare of just 10,000 
yen, nearly half the level of 19,200 yen charged by All Nippon 
Airways Co. and Japan Airlines Corp. 

In response, ANA and JAL are discounting their services to 9,500 yen 
and 9,200 yen, respectively, albeit only until the end of February. 

By comparison, JR's Nozomi bullet train connects Tokyo and Shin-Kobe 
in 2 hours and 45 minutes for 14,670 yen. 

Star Flyer Inc., a Kita-Kyushu-based start-up carrier, will launch 
operations when New Kitakyushu Airport opens, offering up to 12 
flights daily to and from Haneda. 

The current airport has only five Haneda flights by JAL. 

The new Shinkansen timetables will include a Nozomi bullet train 
that allows passengers from Shin-Kobe to arrive at Shinagawa Station 
in Tokyo before 9 a.m. 

The service targets business travelers. 

The number of Nozomi trains that directly link Tokyo and Hakata will 
also increase by 19 to 52 daily. The trains will run at least twice 
an hour, in both directions, from 6 a.m. to 5 p.m. 

Further, 20 Nozomi trains will be added between Nagoya and Hakata. 

The expansion is viewed as a countermeasure against JAL affiliate
J-Air Corp., which will launch a new service from New Kitakyushu 
Airport to Nagoya airport. 

The competitive pressures from the new airports also persuaded
JR West to allow JR Tokai's online discount reservation system to 
handle stations on its Sanyo Shinkansen line between Shin-Osaka
and Hakata. 

The Express Reservation system, which grants discounts to its 
400,000 subscribers, used to be limited to JR Tokai's Tokaido 
Shinkansen line. 

Despite repeated requests from JR Tokai since 2003, JR West had
been reluctant to let the system cover its territory for fear of
a fall in ticket revenues. 

A JR company has to pay commissions for tickets sold by another
JR company. 

JR West relented in September, concluding that losses would be 
offset by an increase in overall passengers. 

>From December, subscribers to the Express Reservation system
are able to buy a Nozomi ticket between Tokyo and Shin-Kobe for 
13,720 yen, 950 yen less than the regular fare. 

"The main airplanes to be used at Kobe Airport and New Kitakyushu 
Airport have limited capacities of 200 passengers or less," a senior 
JR Tokai official said. 

"Together with JR West, we want to emphasize that Shinkansen bullet 
trains offer better transportation capacities and more frequent 
services." 

Shinkansen trains, whose tariffs are set based on travel distance, 
are losing ground to airplanes. 

Airlines have competed to lower fares partly as a result of the 
industry deregulation in the late 1990s. 

In fiscal 2004, Shinkansen trains accounted for 65 percent of the 
overall ridership between Tokyo and Osaka, down from 84 percent in 
fiscal 1995, according to the transport ministry. 

The share of air travelers increased to 35 percent from 16 percent 
over the nine-year period. 

Train passengers between Tokyo and Fukuoka fell to a mere 6 percent 
in fiscal 2004, down from 12 percent in fiscal 1995.

--- End forwarded message ---

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