Peach Aviation, the first of a new wave of low-cost carriers to enter Japan, has reported a solid first month of operations, carrying in Mar-2012 approximately 67,000 passengers across three routes with a load factor of 83%, above initial projections.

This traffic, however, has come at the expense of parent company All Nippon Airways (ANA), which saw year-on-year traffic and load factor declines above the system average. The negative story at the mainline operation is the same when measured against traffic in Mar-2010. While Peach is young and ANA's other LCC, AirAsia Japan, is yet to launch, the presence of traffic cannibalisation is evident. While this is not unexpected and ANA has planned for it, the level of cannibalisation appears to be above ANA's projections. It is a sign of the changing North Asia market, and a worry for ANA, which holds by far the largest share of domestic Japanese capacity – and plans domestic growth in coming years.

British Airways is making one of its first significant network changes following the acquisition of bmi (by parent company International Consolidated Airlines Group) with the Dec-2012 resumption of services to South Korea's Seoul, which BA last served in 1998. BA will operate six weekly Boeing 777-200 flights on the route. "British Airways is delivering on its promise to increase long haul flying to Asia following IAG’s purchase of bmi," the carrier said in a statement.

Following the bmi acquisition IAG CEO Willie Walsh spoke of a number of routes BA would look to launch with the London Heathrow slots bmi would bring to IAG. Mr Walsh named South Korea, as well as Indonesia and Malaysia, as specific examples. 

Frontier Airlines believes its tactic to target markets from its main Denver base not served by rival Southwest Airlines remains the best method in fortifying its major hub. But at the same time Frontier is looking to lessen its reliance on a single hub and is exploring new bases, two of which are opening this summer supported by a single aircraft.

Southwest returned to the Denver market dominated by United and Frontier in 2006, and since that time has built its presence at the airport to 159 daily departures to 51 destinations. Based on US Department of Transportation (DoT) data, Southwest had a 22.5% market share at the airport from Feb-2011 to Jan-2012.

Some members of the public were incredulous last year after Qantas announced it would cut its London capacity by over a third in Mar-2012, months before the summer 2012 Olympic Games being held in London. They saw the Games presenting a large traffic opportunity and thought Qantas should wait for the Olympics to pass before reducing London capacity. But in fact the Olympic Games or any sporting event when held in a large city present little uplift. While leisure demand increases, corporate traffic tends to whittle.

British Airways and Virgin Atlantic, some of the most exposed to London, expect no notable uplift from the Olympics. During the 2008 Olympic Games in Beijing, airlines recorded traffic – and financial – losses as security measures stunted growth. 

The tiny Luxembourg market has been thrust into the spotlight by easyJet’s announcement that it plans to launch the first low-cost carrier service into the small European nation. With no domestic market in Luxembourg, national carrier Luxair relies on a short/medium-haul international network serving Europe and Africa. The arrival of LCC competition will place pressure on the flag carrier, which may find it difficult to compete with budget rivals.

Luxair, which is the only Luxembourg-based passenger carrier, currently offers 36,285 seats per week, according to data from Innovata. Western Europe accounts for about 90% of the carrier’s total capacity (seats) and all 10 of the carrier’s largest routes.

Japan's forthcoming boom in low-cost carriers has yet to enter full swing with AirAsia Japan and Jetstar Japan still to launch, but signs are now emerging of an early and direct affect LCCs will have on legacy carriers.

Japan Airlines (JAL) will suspend its Tokyo Narita-Osaka Kansai service in Jul-2012, the same month JAL-Qantas joint-venture Jetstar Japan will commence operations, including with a daily Tokyo Narita-Osaka Kansai service, increasing to double daily in Aug-2012.

Having gained support from three of American Airline’s unions representing roughly 55,000 employees, US Airways is now moving to convince Wall Street analysts that a merger with American would produce far more favourable results than American’s standalone plan.

US Airways on 20-Apr-2012 won public endorsement from three of American’s unions for its plan to create a "new American” through the combination of the two companies.

Etihad Airways and Ethiopian Airlines intend to launch services to Sao Paulo, the economic heart of the rapidly growing Latin American market. While Sao Paulo is seeing increased capacity from a number of carriers, services from Etihad and Ethiopian are notable for the considerable transfer traffic they will have, including from Asia. Linking the high-growth economies of Asia with their Latin American counterparts has been alluring for many carriers, but distances and aircraft range limitations necessitate all services be one-stop.

Asia-Latin America's traditional, if small time, transfer hubs in North America and Europe have increasingly seen competition from the Middle East. That will be complemented in the next few years with hubs from Africa, first from East Africa and potentially later from West Africa.