Andrzej Jeziorski/SINGAPORE
Japanese domestic start-up Hokkaido International Airlines, operating as Air Do, plans to boost its capital base by more than 40% as it explores possibilities for expansion. It is also in talks with Japan's other recent arrival in the domestic market, Skymark Airlines, about co-operation.
Air Do, based in Sapporo, has been competing with the established "Big Three" Japanese carriers since it began operations last December on one of the busiest air routes in the world - between Sapporo and Tokyo's Haneda Airport. Skymark, launched in September, is operating another major domestic route, between Haneda and Fukuoka.
A third new carrier, Pan Asia Airways, is expected to begin operations early this year.
Air Do is planning to increase its capital by ´1.5 billion ($13.2 million), from ´3.57 billion to ´5.07 billion. About ´500 million-worth of the new shares are expected to be bought by Japanese electronics firm Kyocera, which already owns ´30 million-worth. This will make Kyocera the airline's biggest single shareholder, with a 10.5% stake.
"We are doing this because we need the money. It is very difficult to run a company with one aeroplane," says Air Do president and chief executive Masaki Nakatani. The carrier now operates a single Boeing 767-300ER leased from Ansett Worldwide Aviation Services, and plans to take a second aircraft in fiscal year 1999-2000.
Nakatani says that a third aircraft is under consideration, but stresses that rapid growth is not a priority as expansion at Haneda is limited because of slot constraints. A second route linking Sapporo and Osaka's Itami airport is being considered.
He confirms that Air Do is planning to start co-operating with Skymark in a bid to minimise operating costs. Initially, this will involve sharing a company-owned en route radio link with their aircraft. Later, the co-operation could extend to sharing office space and check-in facilities and Nakatani does not rule out closer operational and business ties between the companies in the longer term.
Skymark, which took delivery of its second 767-300ER in November, has applied for transport ministry approval for two new routes, Osaka to Fukuoka and Sapporo.
Source: Flight International
