The entry of three low-cost carriers in Japan over the last year seems to have been met with nothing short of enthusiasm from passengers.
In March 2012, Peach Aviation become the first pure low-cost carrier to launch operations in Japan. This was followed by the entry of Jetstar Japan in July and AirAsia Japan a month later in August.
Before the carriers started operations, many were unconvinced that the Japanese, who prize service as a priority, would take to low-cost flying.
Figures from Flightglobal's FlightMaps Analytics, however, paint a different story.
Last February, flag carrier Japan Airlines (JAL) and All Nippon Airways (ANA) together accounted for 62% of the country's domestic flight schedule, as measured by ASKs, at Narita airport. Skymark Airlines accounted for 33% of the remaining capacity.
A year on, however, JAL and ANA only account for 40% of the schedule while Jetstar Japan and AirAsia Japan, together with Skymark, account for 58% of the schedule.
Over at Kansai airport, the change is even more apparent. Jetstar Japan, Peach and Skymark make up 49% of the airport's capacity this February, while JAL and ANA account for 40%, down from 88% the same time last year.
Peach is based at Kansai, AirAsia Japan at Narita, while Jetstar Japan has bases at both Kansai and Narita.
"Looking at the data, we can see how the LCCs are really starting to make their presence felt in the Japanese market," says Paul Sheridan, head of consultancy for Asia at Ascend, a Flightglobal advisory service.
The report card seems to have surprised even the carriers themselves.
Jetstar Japan says the Japanese population's response to low-cost travel has "far exceeded" its own expectations, while Peach says it carried a million passengers by last November, nine months after starting operations, which was "ahead of expectations".
"When you start a new route, you'll expect some time to generate the traffic, but we're not seeing that. From day one, we're seeing a very high level of interest," says Luke Lovegrove, Peach's chief commercial officer and commercial director.
Jetstar Japan chief executive Miyuki Suzuki says there was scepticism about whether the low-cost model would take off in Japan because of the perception that the Japanese wanted quality service.
"That has not been the case. The take-up rate has far exceeded all of our expectations," she adds.
Both Peach and Jetstar Japan say that between 30% and 40% of their passengers are first-time fliers - proving that they are capable of growing new traffic instead of cannibalising the market.
"Our observations are that LCCs in Japan have created demand more for inward travel than outward, but this could change if the Japanese yen continues on its downtrend," says Standard & Poor's analyst Shukor Yusof.
The entry of three budget carriers into the Japanese market is a result of deregulation by the government to stimulate the air travel market. The government has increased the number of landing slots, lower landing fees and some airports are even building dedicated low-cost terminals.
Analysts add that there is also room for more low-cost flying in Japan since it has not reached the level of competitiveness seen in Southeast Asia. This, however, does not mean that new entrants will be guaranteed success.
At least one other player, Spring Airlines, is set to enter the market. The Chinese carrier is awaiting approval from the Japanese authorities for a local air operator's certificate and is confident of starting operations in late 2013 or early 2014.
"There is room for more LCC flying, but not necessary more LCCs. One of the lessons learnt from the other parts of the world is that first-mover advantage is critical in establishing an LCC and it is difficult for LCCs to take on incumbents," says Sheridan.
Besides, there are also other carriers such as Skymark and Air Do, which the Japanese can choose to fly with.
"Japan's demographics are also different from the rest of Asia - there are more ageing people there who are unlikely to latch on to the LCC phenomenon," says Yusof.
The challenge now is for the legacy carriers to maintain their marketshare and yields.
The good news though is that all three new players so far are joint ventures with local carriers, since local laws allow foreigners to own only up to a third of a Japanese carrier. Peach and AirAsia Japan are joint ventures with ANA while Jetstar Japan is a joint venture with JAL.
"A full service carrier cannot compete on fares alone because their cost base will mean they will lose out, so they have to ensure that passengers are willing to pay for their service and differentiate themselves by the quality of their service and their connectivity," says Sheridan.