Saturday, December 20, 2014

Skymark mulls Yonago pull-out and Sendai cuts.

Skymark Airlines [BC/SKY] is reportedly considering pulling out from Yonago [YGJ/RJOH] completely, axing its remaining two routes from the eastern Tottori prefecture airport to Kobe [UKB/RJBE] and Sapporo/New Chitose [CTS/RJCC] at the end of August 2015. Its link between Tokyo/Haneda [HND/RJTT] and Yonago was promised to be resumed (Skymark's fate: MLIT discourages foreign investment.) from the Summer 2015 schedule, but that too would be canceled. In addition, Sendai [SDJ/RJSS] – New Chitose is also likely to be terminated in March 2015.

Boeing 737-86N JA737M was returned to lessor GECAS in October as N854TM. It now plies the skies of neighbor South Korea with Jeju Air as HL8020. (Photo: Ryosuke Yano)

Yonago had long been only served by All Nippon Airways [NH/ANA] until December 20th, 2013, when Skymark launched twice-daily service each to Tokyo/Narita [NRT/RJAA] and Kobe [UKB/RJBE], designating it a focus city, before quickly adding two daily to Haneda, one to New Chitose, and another to Okinawa/Naha [OKA/ROAH] (Skymark announces Yonago and Sendai expansion.) from April 1st, 2014. 177-seat Boeing 737-800s operated all routes.

However, after the rapid depreciation of the JPY, high fuel prices, intensified competition with LCCs, and costs related to the introduction of the Airbus A330 (Skymark Airlines inaugurates Airbus A330 service.) and the now-canceled A380 (Skymark's Airbus A380 order in jeopardy.) pushed Skymark to a whopping 5.7 billion JPY loss during only the first quarter (Skymark posts 5.7 billion JPY loss for 1Q FY2014.), they quickly started winding down Yonago. Haneda, Narita, and New Chitose were all axed at the end of October (Skymark announces Narita closure and Yonago cuts.). The Narita route saw load factors treading around an embarrassing 20-30%, while others did not perform much better showing 40-50%. The Haneda link was recording a modest 50-60%, but with ANA retaliating by slashing fares, yields were low.

Sendai – New Chitose has been Skymark's poorest performer since the October closure of Narita and reductions at Ibaraki [IBR/RJAH] and Yonago, with load factors hovering around 30-40%. The capital city of Miyagi prefecture, which is by far the biggest city in northeastern Japan, is also a focus city for the troubled third largest domestic carrier. Its double-daily flights to Fukuoka [FUK/RJFF] fared better with load factors showing 60-70%, while its single daily to Kobe has not been impressive at around 40-50%. 

Source: Asahi Shimbun, December 19th. (in Japanese)

Friday, December 19, 2014

Solaseed Air to add Ishigaki and Nagoya from Okinawa.

On December 19th, Skynet Asia Airways [6J/SNJ] (d.b.a. Solaseed Air) revealed that they will launch Okinawa/Naha [OKA/ROAH] – Ishigaki [ISG/ROIG] and Naha – Nagoya/Chubu Centrair [NGO/RJGG] on March 29th, 2015, the beginning of the Summer 2015 timetable. Frequencies, schedules, and other details will be released during the latter half of January. 174-seat Boeing 737-800s, on which the fleet has been standardized, will be assigned.

Boeing 737-86N(WL) JA803X takes off from Tokyo International Airport at Haneda. Solaseed Air completed transitioning to an all-737-800 fleet on September 30th (Solaseed Air bids farewell to the Boeing 737-400.). (Photo: Aviation Wire)

The Miyazaki [KMI/RJFM]-based carrier will take delivery of its 12th 737-800 in March 2015, and it has been anticipated that new routes would be launched, in addition to earlier-announced international charters (Solaseed Air eyes international charters in FY2015.) to China, South Korea, and Taiwan. Although not designated a hub, Solaseed Air has a growing Naha operation, with two daily flights to Kagoshima [KOJ/RJFK], three to Kobe [UKB/RJBE], and one to Miyazaki. All flights code-share with All Nippon Airways [NH/ANA], a subsidiary of ANA Holdings, which owns 8.56% of Solaseed Air.

The Naha – Chubu Centrair route already sees three carriers competing; ANA Group operates two daily, Japan Transocean Air [NU/JTA] three, and Skymark Airlines [BC/SKY] two. Meanwhile, Naha – Ishigaki is a fiercer battleground, with ANA Group flying eight daily, JTA eight daily, Ryukyu Air Commuter [RAC] one, and Skymark three. The latter route additionally saw LCC Peach Aviation [MM/APJ] until July 18th (Peach launches Naha hub; but Naha – Ishigaki axed.), when they suspended the route and eventually axed it, citing heavy competition.

However, this is probably a plan already well-coordinated with de facto parent ANA, like the case with Star Flyer [7G/SFJ] (Star Flyer launches Yamaguchi-Ube.) when they virtually took over some of ANA's flights at Yamaguchi-Ube. Both of Solaseed Air's new routes will probably code-share with ANA, and instead Japan's largest carrier will likely reduce frequency to free-up some narrow-body aircraft.

Source: Skynet Asia Airways, December 19th. (PDF; in Japanese)

Thursday, December 18, 2014

Vanilla Air to suspend Seoul.

On December 17th, Vanilla Air [JW/VNL] announced their Summer 2015 schedule, effective from March 29th, 2015. While increasing frequencies to the popular domestic holiday destinations of Okinawa/Naha [OKA/ROAH] and Sapporo/New Chitose [CTS/RJCC], its daily round-trip connecting Tokyo/Narita [NRT/RJAA] and Seoul/Incheon [ICN/RKSI] will be suspended. Tickets for most flights went on sale at 1400 JST on December 18th.

Airbus A320-211 JA8391 LOHACO Jet (Vanilla Air's 'LOHACO Jet' enters service.) lines up for departure from New Chitose on an autumn afternoon. All three 166-seat former ANA A320s have now been replaced by brand new A320s (Vanilla Air unveils new interior with latest Airbus A320.). JA8391 was the last of the three to leave Japanese soil on November 29th, and was ferried to Tucson, U.S.A. for part out. (Photo: Ryosuke Yano)

Network Overview (from March 29, 2015):
Narita – Amami 1 daily. (no change)
Narita – Hong Kong 2 daily. (no change)
Narita – Kaohsiung 1 daily. (no change)
Narita – Naha from up to 2 daily to up to 3 daily. (INCREASE)
Narita – New Chitose from up to 4 daily to up to 8 daily. (INCREASE)
Narita – Seoul/Incheon 1 daily suspended. (SUSPENSION)
Narita – Taipei/Taoyuan 3 daily. (no change) 

The fledgling Narita-based LCC, a wholly owned subsidiary of ANA Holdings, launched service to Incheon on March 1st (Vanilla Air adds Seoul to its network.) and quickly increased it to double-daily two weeks later. However, it was reduced to a daily service from October 26th (Vanilla Air announces Hong Kong and Kaohsiung.) and that too has now been announced to be cut. Branding itself as a leisure LCC, Vanilla Air depends heavily on tourism-oriented travelers, and performance of their sole route to South Korea has been susceptible to the fragile political relationship between the two neighboring nations.

Source: Vanilla Air, December 17th. (in Japanese)

Saturday, December 13, 2014

ANA announces Houston and Southeast Asia expansion.

On December 11th, All Nippon Airways [NH/ANA] announced that they will launch non-stop Tokyo/Narita [NRT/RJAA] – Houston/George Bush [IAH/KIAH] service on June 12th, 2015. It will be operated daily using their 250-seat (eight first, 52 business, and 190 economy class) Boeing 777-300ERs. It will be the first time the Texas airport, which is a hub for joint-venture (JV) and Star Alliance partner United Airlines [UA/UAL], will receive a direct link to Japan on a Japanese carrier.

Boeing 767-381/ER JA606A FLY! PANDA operated its last revenue flight in the special livery on December 9th with NH906, service from Beijing to Narita. It started flying on July 25th, 2007 to celebrate ANA's 20th anniversary of flights to China. She will receive normal colors along with a conversion to domestic configuration. (Photo: Ryosuke Yano)

The new service will augment United's existing daily flight, and is aimed at enhancing connection to and from Latin America, especially Mexico, where the presence of Japanese companies is rapidly increasing, and South America.

Flight Schedule:
Narita – Houston/George Bush NEW 1 daily with B777-300ER.
NH174 NRT 1115 – 0930 IAH 77W Daily *From 2015/Jun 12.
NH175 IAH 1120 – 1520(+1) NRT 77W Daily *From 2015/Jun/12.

At the same time, ANA also announced the addition (or resumption) of a second daily flight from Narita to Singapore/Changi [SIN/WSSS] from June 11th and to Bangkok/Suvarnabhumi [BKK/VTBS] from August 1st. 169-seat (46 business, 21 premium economy, and 102 economy class) long-haul-configured Boeing 787-8s will be assigned to the new flights, bringing its hard product on par with its competitors, which already offer lie-flat seats in business class.

Flight Schedule: 
Narita – Bangkok/Suvarnabhumi increase from 1 to 2 daily.
NH807 NRT 1655 – 2135 BKK 788 Daily *NEW from 2015/Aug/1.
NH805 NRT 1815 – 2255 BKK 772 Daily
NH808 BKK 0030 – 0840 NRT 788 Daily *NEW from 2015/Aug/2.
NH806 BKK 0650 – 1500 NRT 772 Daily 

Narita – Singapore/Changi increase from 1 to 2 daily.
NH845 NRT 1700 – 2315 SIN 788 Daily *NEW from 2015/Jun/11.
NH801 NRT 1805 – 0005(+1) SIN 788 Daily
NH846 SIN 0035 – 0845 NRT 788 Daily *NEW from 2015/Jun/12.
NH802 SIN 0550 – 1400 NRT 788 Daily

The new services strengthen ANA's Narita hub as a Asia - North America transit point. Together with its two daily round-trips from Tokyo/Haneda [HND/RJTT], Japan's largest carrier will operate four daily round-trips on these two key Southeast Asian routes. 

ANA will be taking delivery of three additional 777-300ERs between March and May next year along with several 787s, so further new services are likely to be announced in due course. For Summer 2015, rumors point out to another route (or frequency increase) to North America, the addition (or resumption) of its Narita – London/Heathrow [LHR/EGLL] route, which was moved to Haneda this spring (ANA's Summer 2014 international expansion.), plus three new cities in Asia. Narita – Kuala Lumpur/International [KUL/WMKK], Haneda – Istanbul/Atatürk [IST/LTBA] (ANA considering Haneda – Istanbul.), and its first route to Cambodia (either Phnom Penh or Siem Reap) seem to be at the top of their wishlist.

Source: All Nippon Airways, December 11th. (in Japanese)

Thursday, December 11, 2014

Skymark forced to seek ANA & JAL dual tie-up.

Skymark Airlines [BC/SKY] will ask ANA Holdings, parent of All Nippon Airways [NH/ANA] for a partnership as early as next week, according to a Nikkei report. Japan's struggling third largest carrier had only revealed on November 21st that they were seeking help from Japan Airlines [JL/JAL] in the form of a broad code-share pact (Skymark in talks with JAL for broad tie-up.). However, the government's Ministry of Land, Infrastructure, Transport, and Tourism (MLIT) decided to postpone granting permission, and instead has since been pushing Skymark to partner with ANA as well.

Airbus A330-343E JA330A taxies at Haneda. Skymark's introduction of the type (Skymark Airlines inaugurates Airbus A330 service.) reduced load factors, and the recent negative publicity is further hurting figures. (Photo: Ryosuke Yano)

If roughly 20% of its seats are sold to ANA and JAL, respectively, it could generate an estimated annual 16 billion JPY for the cash-strapped airline. However, Skymark's President and CEO Shinichi Nishikubo expressed his displeasure, repeating many times that partnering with both "defied common sense and is divorced from the logic of private-sector enterprise," adding "For this time, we'll be compromising with the authorities," citing the dual-partnership scenario is orchestrated by the MLIT. This would delay code-share launch from February to late March, the beginning of the Summer 2015 timetable, at earliest.

From a consumer's point of view, Skymark's full independence is crucial to keeping prices low at heavily-regulated Tokyo/Haneda [HND/RJTT]. But with that now almost impossible with cash reserves quickly running low, the next best scenario would be a JAL partnership. Slot-count-wise, JAL controls 40.0% at 184.5 slot-pairs and All Nippon Airways [NH/ANA] 37.4% at 172.5 slot-pairs, while Skymark holds 7.8% with 36 slot-pairs. However, if the slots of AIRDO [HD/ADO] (d.b.a. Air Do), Skynet Asia Airways [6J/SNJ] (d.b.a. Solaseed Air), and Star Flyer [7G/SFJ], all of which code-share with ANA throughout their networks and are de facto controlled by Japan's largest carrier (New Star Flyer President is from ANA.) are combined, ANA's share rises to 52.2%. A Skymark partnership would increase JAL's share to 47.8% against ANA's, which would maintain close competition.

On the other hand, the other way around would have a detrimental effect, where ANA would control 60% and JAL remaining at only 40%. And despite knowing this, the MLIT has been pushing for a de facto takeover of Skymark by ANA. The biggest reason behind this is that the current Liberal Democratic Party (LDP)-controlled government wants to portrait the then-Democratic Party of Japan (DPJ)-led government's massive bailout of JAL from their 2010 bankruptcy, one of the nation's most spectacular corporate failures, a misuse of taxpayer's money. And more, JAL accomplished a remarkable turnaround, and staunch LDP conservatives are willing to do whatever they can to dilute JAL's success.

ANA wants to take advantage of its comfortable relationship with the current government to further widen its domestic share lead against JAL. It wants Skymark to come under ANA's umbrella, joining the likes of Air Do, Solaseed Air, and Star Flyer. (Photo: Aviation Wire)

Hence ANA's awarding of eight slot-pairs when domestic slot-pairs at Haneda were increased by 25 in March 2013. That time, Air Do received two, Solaseed Air three, Star Flyer five, while Skymark was awarded four and JAL only three. But with ANA virtually controlling the former three through minority investments, code-sharing, and coordinating schedules, they virtually received 18 slot-pairs at their disposal. For international slot-pairs that were awarded in March 2014, ANA received 11 (ANA's Summer 2014 international expansion.) while JAL only five. ANA has clearly been the government's favorite.

A JAL spokesperson has said "If it was a request from the MLIT, we won't say anything," adding the second largest domestic carrier is willing to code-share even with ANA joining. However, ANA has been saying "In no way will we let a JAL/Skymark partnership happen," and sources say that ANA is only seeking for a sole-partner scenario where ANA would invest in Skymark to have managerial influence over routes and prices it operates, replicating what it did with Air Do, Solaseed Air, and Star Flyer and how it controls them. However, for Mr. Nishikubo, who has often said out loud "We take great pride that we have been independent without the help of any major carriers, which has enabled us to change the industry significantly," joining the likes of the three young carriers under ANA is the last thing they will be looking into.

An MLIT official has been quoted as saying "We want them to do whatever they can to remain the third force." However, after the December 14th snap elections for Lower House seats, where the LDP is still widely expected to win with opposition parties still unorganized and unprepared, political fiddling could get even stronger. Mr. Nishikubo has also confirmed that they are currently talking with four investment funds to sell up to 25% of its shares in January to raise cash, though adding that the money would be used to pay early-return penalties for some of its leased Boeing 737s that will be disposed of, and to stay afloat until the code-share pact comes into effect. It illustrates the rapidly deteriorating financial state of the airline.

Unfortunately for Skymark, with ANA enjoying strong lobbying power with the current government, a deal which could be acceptable to Mr. Nishikubo is unlikely to bear fruit too soon. And the longer it takes, Skymark's financial situation would only become worse. Or maybe some politicians and ANA are hoping for that scenario, where the only way out for Mr. Nishikubo would be a de facto ANA takeover? The government should be regulating, not fiddling with aviation politics. Consumer's should be put first, not the interests of politicians or mega corporations. I certainly do hope they can reach a sensible solution, but I'm afraid Japanese politics is not there yet.

Source: Nikkei Shimbun, December 9th. (in Japanese) 
Source: NHK, December 10th. (in Japanese)
Source: Skymark Airlines, December 10th. (PDF; in Japanese)
Source: Skymark Airlines, December 10th. (PDF; in Japanese)
Source: Nikkei Shimbun, December 10th. (in Japanese)

Tuesday, December 9, 2014

Hokkaido Air System to fly Happy Air Connection.

Hokkaido Air System [HC/NTH] will operate one of their aircraft, Saab SF340B-WT JA01HC, in a Happy Air Connection special livery as part of a Kushiro City-led campaign to promote the local carrier's Sapporo/Okadama [OKD/RJCO] – Kushiro [KUH/RJCK] service. It will start flying on December 16th and ply the northern skies until the end of March next year.

An image of Saab SF340-WT JA01HC Happy Air Connection. (Image: Hokkaido Air System)

The intra-Hokkaido route is one of a handful Japan's Ministry of Land, Infrastructure, Transport, and Tourism (MLIT) selected for the Rural Air Services Revitalization Program. 36 million JPY worth of grants will be used to offer discounted airport bus tickets as well as publish a free travel magazine to promote the sightseeing spots and restaurants of Kushiro. The special scheme with the message "Go! Go! Kushiro" will also be worn by an airport bus.

During the period, passengers traveling on the route will receive a coupon that could be used to reduce the airport bus fee between Kushiro Airport and the city from 500 JPY to 440 JPY, as well as give a free bus ticket for travel between Okadama Airport and the nearest subway station in Sapporo. A 2,000 JPY discount will also be offered to those using rental cars from Kushiro Airport.

Source: Hokkaido Air System, December 1st. (PDF; in Japanese)
Source: Hokkaido Shimbun, December 3rd. (in Japanese)

Wednesday, December 3, 2014

Jetstar Japan loads first international to Hong Kong.

On December 3rd, Jetstar Japan [GK/JJP] announced that they will launch its first international service on February 28th from Osaka/Kansai [KIX/RJBB] to Hong Kong [HKG/VHHH]. The Tokyo/Narita [NRT/RJAA]-headquartered LCC will start with three weekly flights using 180-seat Airbus A320s, with frequency to be increased gradually.

Airbus A320-232(SL) JA17JJ taxies at New Chitose Airport near Sapporo. (Photo: Ryosuke Yano)

It will operate a morning outbound leg from Kansai and an afternoon return leg from Hong Kong on Fridays, Saturdays, and Sundays until March 28th, except for February 28th and March 3rd, which is a Saturday and Tuesday. From March 29th through July 17th, the flight will operate on Wednesdays, Fridays, and Sundays, and time will also move to an evening departure and a red-eye return arrival.

Flight Schedule (February 28th - July 17th, 2015):
Kansai – Hong Kong NEW 3 weekly with A320-200.
GK061 KIX 0955 – 1310 HKG 32A/320 Sa *Feb/28 only.
GK061 KIX 0840 – 1155 HKG 32A/320 Tu *Mar/3 only.
GK061 KIX 0835 – 1150 HKG 32A/320 Fr/Su *Mar/6 - 28.
GK061 KIX 0955 – 1310 HKG 32A/320 Sa *Mar/6 - 28.
GK063 KIX 1720 – 2015 HKG 32A/320 We/Fr/Su *Mar/29 - Jul/17.
GK062 HKG 1410 – 1825 KIX 32A/320 Sa *Feb/28 only.
GK062 HKG 1300 – 1715 KIX 32A/320 Tu *Mar/3 only.
GK062 HKG 1245 – 1700 KIX 32A/320 Fr/Su *Mar/6 - 28.
GK062 HKG 1410 – 1825 KIX 32A/320 Sa *Mar/6 - 28.
GK064 HKG 2125 – 0205(+1) KIX 32A/320 We/Fr/Su *Mar/29 - Jul/17.

Fares will start from 5,990 JPY and go up to 33,490 JPY, excluding the 2,200 JPY fuel surcharge, for a one-way Starter fare, which only includes a seven-kilogram carry-on baggage allowance. Tickets went on sale today, December 3rd, at 1600 JST. A limited number of seats are being offered at a promotional price of 599 JPY, excluding the 2,200 JPY fuel surcharge. Fares can be upgraded to Plus Bundle for 2,000 JPY extra, which adds mileage accrual on either Japan Airlines' [JL/JAL] Mileage Bank or Qantas Airways' [QF/QFA] Frequent Flyer, free seat selection, and a 1,000 JPY voucher for use on board. 12,400 JPY extra would get you a Max Bundle fare, which adds a 20-kilogram check-in baggage allowance, flight change flexibility (at a cost), and partner lounge access, in addition to the Plus Bundle benefits.

Japan – Hong Kong had been a market not penetrated by LCCs, until Hong Kong Express Airways [UO/HKE] (d.b.a. HK Express) and Peach Aviation [MM/APJ] entered relatively recently. Jetstar Japan's choice of the former British colony may also have to do with shareholder JAL not serving the market from Kansai anymore. Narita may have been avoided (at least initially) due to LCCs rapidly adding capacity in the coming months, with Vanilla Air [JW/VNL] (Vanilla Air inaugurates Hong Kong.) going double-daily and HK Express going 12 weekly from February. The latter is also going double-daily on their Tokyo/Haneda [HND/RJTT] route later this month.

But Kansai doesn't seem too much easier. Rival Peach already operates double-daily along with HK Express' double-daily. It will also need to fight with the full-service carriers; Air India [AI/AIC] flies three weekly, All Nippon Airways [NH/ANA] once daily, and Cathay Pacific Airways [CX/CPA] five to six daily. However, if sister carrier Jetstar Hong Kong [JM/JKT] succeeds in obtaining an operating permit from the local authorities, synergies, including connections, could help both.

Regional international routes is the last ingredient of Jetstar Japan's original recipe. A 11 billion JPY capital injection by its two major shareholders JAL and Qantas was only announced last week (Jetstar Japan to receive 11 billion JPY from JAL and Qantas.), after the so-far-unprofitable LCC posted another 11.1 billion JPY loss (Jetstar Japan lost 11.1 billion JPY in its third year.), its biggest loss yet, which put themselves in three consecutive years of losses. An insufficient number of trained maintenance workers had repeatedly delayed the launch of its Kansai hub (Jetstar Japan launches Kansai hub.), which lowered aircraft utilization rates and forced the company to delay opening new routes.

Source: Jetstar Japan, December 3rd. (PDF; in Japanese)

Tuesday, December 2, 2014

JAL's Sky Suite 787 makes debut.

On December 1st, Japan Airlines [JL/JAL] placed their first Sky Suite 787 into service. Boasting JAL's award-winning Sky Suite interior (JAL adding more Sky Suite destinations.), Boeing 787-8 JA837J, their 16th Dreamliner to be delivered, entered service with flight JL407 from Tokyo/Narita [NRT/RJAA] to Frankfurt/Main [FRA/EDDF]. It departed Spot 62 in Terminal 2 at 1219 with a load of 159 passengers.

Boeing 787-8 JA837J Sky Suite 787 takes off from Narita bound for Frankfurt. (Photo: Aviation Wire)

Fully lie-flat business class seats have been introduced for the first time on JAL's 787s (previously only angled lie-flat seats), while premium economy is also a first for their Dreamliners. Economy has been revamped as well, with new Sky Wider II seats installed. Seat count has been reduced to 161, comprised of 38 business, 35 premium economy, and 88 economy, the lowest-density 787 in commercial service to date. Even the Sky Suite 767s carry 199, including 24 in business and 175 in economy. JAL's previous 787-8s seated 186, with 42 in business and 144 in economy. Japan's second largest carrier believes higher revenue per seat will offset the reduction in capacity.

Lie-flat staggered business class seats on the Sky Suite 787. (Photo: Aviation Wire)

Business class is in a six-abreast (2-2-2) staggered layout with direct aisle access from every seat while enhancing privacy. Personal in-flight entertainment (IFE) screens are 19 centimeters (7.6 inches) wider than those on previous 787s, opting for 23-inch monitors. Premium economy has been configured with 49-centimeter-wide (19.4 inches) seats at seven abreast (2-3-2). Retaining the design from the Sky Suite 777, the seats are of a fixed-back type, so the seat-back in front does not recline but instead the whole seat slides forward. Economy class is in a generous eight-abreast (2-4-2) layout, bucking the worldwide trend of nine abreast. Seats are 48 centimeters wide (19 inches) with a pitch of 84 centimeters (33 inches), five centimeters more than the current Dreamliners. Personal IFE monitors are 27-centimeters wide (10.6 inches).

Premium economy on the Sky Suite 787 is in a seven-abreast layout. (Photo: Aviation Wire)

IFE has been upgraded to MAGIC-VI and monitors are touch-controlled with swiping. In-flight wireless internet connection dubbed JAL Sky Wi-Fi will also be available from the end of 2014. Toilets in all classes will boast washlets, now one of Japan's modern icons. Previous 787s only had business class lavatories equipped with these butt-cleaning gadgets. Cabin LED lighting patterns will be set according to the season, for example with red and green to be featured for December.

JAL is staying with eight abreast for economy in the Sky Suite 787. (Photo: Aviation Wire)

Aimed at "evoking a one-class higher feel," according to President Ueki Yoshiharu, JAL's first Sky Suite aircraft, a 777-300ER, entered service on the Narita – London/Heathrow [LHR/EGLL] route in January 2013, while the first re-configured 767-300ER was introduced on the Narita – Vancouver [YVR/CYVR] link in December 2013. The Sky Suite 777 seats eight in first, 49 in business, 40 in premium economy, and 135 in economy (232 total), while the Sky Suite 767 seats 24 in business and 175 in economy (199 total). JAL currently has all 13 777-300ERs along with nine 767-300ERs in this upgraded layout.

At least 10 upcoming Dreamliner deliveries will be configured with Sky Suite, including the stretched 787-9s. The next destination to see the service will be New York/John F. Kennedy [JFK/KJFK], starting on January 1st, 2015 with flights JL004/003. In contrast to archrival All Nippon Airways [NH/ANA], which has sadly (to frequent flyers) joined the flock of carriers with nine-abreast (3-3-3) economy (ANA takes 150th Boeing 787 delivery.), JAL is clearly going after the premium market for international routes.

Source: Japan Airlines. (in Japanese)
Source: Aviation Wire, November 29th. (in Japanese)
Source: Aviation Wire, December 1st. (in Japanese)

Monday, December 1, 2014

IBEX Airlines retires first Bombardier CRJ.

IBEX Airlines' [FW/IBX] first aircraft, Bombardier CL-600-2B19 Regional Jet CRJ-100LR JA01RJ, was retired after operating its last revenue flight on November 11th. Earlier last month, the Sendai [SDJ/RJSS]-based commuter carrier took delivery of its sixth CL-600-2C10 CRJ-702NG, JA10RJ, beginning a transition to an all-CRJ-700NG fleet by the end of FY2016 (IBEX to retire Bombardier CRJ-100/200s by FY2016.).

Sister-ship Bombardier CL-600-2B19 CRJ-100LR JA02RJ, the remaining sole Series 100, taxies at New Chitose Airport near Sapporo. It will also be retired next year. (Photo: Ryosuke Yano)

Originally founded on January 29th, 1999 as The Fair Inc (d.b.a. Fair), Japan's first independent regional start-up took delivery of the first aircraft from Lauda Air [NG/LDA] on May 31st, 2000. Service was inaugurated two months later on August 7th from Sendai to Osaka/Kansai [KIX/RJBB]. The current name was taken up on October 1st, 2004, after Japan Digital Laboratory (JDL), which now controls 47.9% (its President Kazuo Maezawa owns another 18.8%), became by far the largest shareholder.

IBEX currently operates six CRJ-700NGs, two CRJ-200ERs, and one CRJ-100LR on 16 routes totaling 54 daily flights, with all flights code-sharing with All Nippon Airways [NH/ANA] under the branding ANA Connection. Their seventh CRJ-700NG will be delivered in June 2015 with their eight expected a year later, while the sole remaining CRJ-100LR will be retired in FY2015 with the two CRJ-200ERs to follow in FY2016.

Sunday, November 30, 2014

Air Do bids farewell to Bear Do Dream.

AIRDO [HD/ADO] (d.b.a. Air Do), as planned (Air Do to retire Bear Do Dream on November 30th.), retired its last specially-themed aircraft, Boeing 737-54K JA305K Bear Do Dream, on November 30th after it operated flight HD028, service from Sapporo/New Chitose [CTS/RJCC] to Tokyo/Haneda [HND/RJTT].

Boeing 737-54K JA305K Bear Do Dream takes off. (Photo: Norio Hasegawa/Air Do)

The final flight into the company's homeland of Hokkaido was HD025, service from Haneda, which carried 124 passengers. The return leg to Tokyo became the ultimate flight, which carried a full load of 126 passengers and departed at 1609 JST, nine minutes behind published time. Air Do's mascot Bear Do was present at the gate to shake passengers' hands and all on board received a last flight certificate along with memorabilia. 

Bear Do Dream inaugurated service on March 24th, 2011 as the Hokkaido carrier's second special livery airplane after Boeing 737-54K JA8196 Bear Do, which entered service on April 6th, 2009 and was retired on March 14th earlier this year (Air Do retires 'Bear Do'; five Boeing 737-500s remain.). The aircraft flew approximately 630,000 passengers over three years and eight months until its retirement today. Manufactured on September 21st, 1998, it was originally delivered to then-All Nippon Airways [NH/ANA] subsidiary Air Nippon [EL/ANK]. After a maintenance check and repaint, it will return to service with ANA Wings [EH/AKX].

Air Do's narrow-body fleet is currently transitioning from 126-seat 737-500s to 144-seat 737-700s, both supplied from ANA, subsidiary of ANA Holdings, which controls 14% of the Hokkaido-based carrier. Bear Do Dream's departure will leave the fleet with two 767-300ERs, two 767-300s, six 737-700s, and three 737-500s, with the remaining trio of 'Classic' Baby Boeings slated for replacement by an identical number of 737-700s by January 2016.

Source: Aviation Wire, November 30th. (in Japanese)

Saturday, November 29, 2014

Jetstar Japan to receive 11 billion JPY from JAL and Qantas.

On November 28th, Japan Airlines [JL/JAL] and Qantas Airways [QF/QFA] announced that they would each inject 3.5 billion JPY into Jetstar Japan [GK/JJP], and are each prepared to give another 2 billion JPY if necessary. The loss-making Tokyo/Narita [NRT/RJAA]-based LCC already intends to exercise that option, for a total of 11 billion JPY. Voting-rights-based, the Japanese unit of the successful Australian LCC is 33.3% controlled by JAL, 33.3% by Qantas, 16.7% by Mitsubishi, and 16.7% by Century Tokyo Leasing.

Airbus A320-232(SL) JA08JJ taxies at Narita. (Photo: Ryosuke Yano)

In October last year, after Jetstar Japan posted a 8.8 billion JPY net loss for the full year ending on June 30th, 2013, the two biggest shareholders agreed to inject a sum of 11 billion JPY (Jetstar Japan releases Summer 2014 schedule.) to keep it afloat. However, the LCC posted another 11.1 billion JPY net loss for its third full year ending on June 30th, 2014 (Jetstar Japan lost 11.1 billion JPY in its third year.) and shareholder equity had plummeted to 400 million JPY, which led to the second injection.

Jetstar Japan cited repeated delays in setting up its second hub at Osaka/Kansai [KIX/RJBB] as the main reason. Insufficient number of trained maintenance personnel forced them to delay the launch five times, with as many as five to six of the 18 Airbus A320s sitting idle at Narita, bringing down aircraft utilization. Deliveries of new aircraft were also put off. Planned regional international routes also had to be postponed. These coupled with a depreciated JPY and high fuel prices led to increased costs well exceeding increased revenue.

However, pieces of the original recipe are finally becoming reality, with the second hub at Kansai finally launched in June (Jetstar Japan launches Kansai hub.), and Jetstar Japan officially announcing its intention to launch international flights from Spring 2015. Regional destinations that are within reach of their A320s are being considered, with Taiwan and the Philippines at the top of the list. Partnership-wise, American Airlines [AA/AAL] became the second carrier after JAL to code-share, starting from October 26th covering five routes from Narita, and Qantas is finally expected to start code-sharing from sometime in January 2015 on all nine routes from Narita. Fleet-wise, expansion has been restarted, with the 20th A320 to arrive in December.

Source: NHK, November 28th. (in Japanese)
Source: Aviation Wire, November 28th. (in Japanese) 

*Edited/updated on December 3rd, 2014.

Tuesday, November 25, 2014

Peach announces Okinawa – Hong Kong.

On September 25th, Peach Aviation [MM/APJ] announced their intention to start four-times-weekly Okinawa/Naha [OKA/ROAH] – Hong Kong [HKG/VHHH] service on February 21st, 2015. It will be operated on Mondays, Wednesdays, Saturdays, and Sundays using 180-seat Airbus A320s.

Airbus A320-214 JA801P lines up for takeoff from Runway 19R at New Chitose Airport near Sapporo on a clear October afternoon. (Photo: Ryosuke Yano)

This becomes the seventh international route for the Osaka/Kansai [KIX/RJBB]-based LCC, which only opened its second hub at Naha on July 19th (Peach launches Naha hub; but Naha – Ishigaki axed.). It will be the fourth direct link from Naha after Fukuoka [FUK/RJFF], Kansai, and Taipei/Taoyuan [TPE/RCTP]. The last time a Japanese carrier flew the route was 12 years ago. Peach already operates double-daily flights to Hong Kong from Kansai.

Flight Schedule (effective February 21st through March 28th, 2015):
Naha – Hong Kong NEW 4 weekly with A320-200.
MM965 OKA 1645 – 1830 HKG 320 Mo
MM965 OKA 1530 – 1715 HKG 320 We
MM965 OKA 1525 – 1710 HKG 320 Sa
MM965 OKA 1305 – 1450 HKG 320 Su
MM964 HKG 1235 – 1550 OKA 320 Mo/We/Sa/Su
 
Prices will range from 7,180 JPY to 33,580 JPY for a one-way unbundled Happy Peach fare, while one-way Happy Peach Plus, which includes one baggage allowance, free seat selection, and no charge for flight change, will range from 9,980 JPY to 41,580 JPY. Tickets will go on sale tomorrow on November 26th.

The new route also becomes the first to be launched after Peach encountered pilot shortages which caused widely-publicized travel disruptions (Peach outlines Summer 2014 mass cancellations.) this past summer. Their 14th A320 was delivered earlier this month, and Peach will start expanding again cautiously, on top of what was already a conservative plan to add only three aircraft each year through 2016.

Reference: Nikkei Shimbun, November 24th. (in Japanese)
Reference: Aviation Wire, November 25th. (in Japanese) 

Monday, November 24, 2014

Is the new AirAsia Japan delaying launch?

It was July 1st when the reincarnation of AirAsia Japan (Mk II) was boldly announced (AirAsia Japan is officially reborn; first flight June 2015.) with non-airline partners Octave Japan Infrastructure Fund owning 19%, Rakuten 18%, Noevir Holdings 9%, and Alpen 5% with an initial capital totaling 7 billion JPY, together with AirAsia's [AK/AXM] 49%. First flight was told to take place as early as July 2015 from Nagoya/Chubu Centrair [NGO/RJGG] (AirAsia Japan selects Nagoya Chubu Centrair.) initially with domestic routes. But nothing has been heard from them since.

However, in their Third Quarter 2014 report, the AirAsia Group announced plans to take only five Airbus A320s in 2015, with four earmarked for Thai AirAsia [FD/AIQ] and a single aircraft for AirAsia (Malaysia). The southeast Asia market is now suffering from overcapacity and most of AirAsia Group's airlines are incurring losses or significantly reduced profits, though still performing better than most competitors. In the previous version of its 2015 fleet plan, which was released in August as Second Quarter 2014 earnings were reported, the LCC group had additionally earmarked three A320s each for AirAsia India [I5/IAD] and Japan. Does this  mean AirAsia Japan (Mk II) will not take delivery of any aircraft, and thus not launch operations next year? Or are some of the Malaysian unit's surplus A320s coming over?

Airbus A320-216 HS-ABO of Thai AirAsia taxies at Bangkok's Don Mueang. All of AirAsia's affiliates are incurring losses or significantly reduced profits. With aircraft for AirAsia Japan no longer in the orderbooks for 2015, has the launch been delayed? (Photo: Ryosuke Yano)

And on November 22nd, Skymark Airlines' [BC/SKY] President and CEO Shinichi Nishikubo disclosed that AirAsia Group was indeed one of a handful of carriers they were negotiating with for a partnership. Japan's third largest carrier looked for new tie-ups as their profitability rapidly deteriorated (Skymark posts 5.7 billion JPY loss for 1Q FY2014.) amid a depreciated JPY, heavy competition with LCCs as well as full-service carriers, and costs related to the introduction of the A330 (Skymark Airlines inaugurates Airbus A330 service.) and now-canceled A380 (Skymark's Airbus A380 order in jeopardy.). But Mr. Nishikubo has narrowed down its potential partner to Japan Airlines [JL/JAL] (Skymark in talks with JAL for broad tie-up.), and told that talks with AirAsia Group started in August and only ended earlier this month.

Actually, it is now known that Hiroshi Mikitani, President of AirAsia Japan's (Mk II) key partner Rakuten, was on the verge of acquiring a majority stake in Skymark earlier this spring. However, the deal fell through when Mr. Mikitani found out about Skymark's troubles regarding the A380 order, a few months before that news came to light. So, AirAsia Japan (Mk II) probably had some inside knowledge about Skymark's financial state and outlook. "We will start from a non-Tokyo city, but Tokyo is a very big market that cannot be omitted," told Yoshinori Odagiri, CEO of AirAsia Japan (Mk I & II), who has seemed confident in obtaining slots at heavily-regulated Tokyo/Haneda [HND/RJTT]. Or had they drawn a picture of taking over Skymark from the first place (Is AirAsia considering a Skymark takeover?)? 

With the government's target to bring 20 million visitors to Japan by 2020 when the Tokyo Olympics/Paralympics take place, opening up airspace over metropolitan Tokyo, which could potentially create 50 or so more slot-pairs at Haneda, is seriously being discussed. But the Japan Civil Aviation Bureau (JCAB) along with the government so far seem unwilling to distribute the slots to LCCs, calling it "prized properties that belong to the Japanese public." AirAsia is counting on Mr. Mikitani, who is a member of the government's Economic Revitalization Committee and has personal relationships with Prime Minister Shinzo Abe, to receive slots at the preferred Tokyo airport near downtown.

Nagoya is a huge metropolitan area that could potentially become a home for an LCC. However, the market is underdeveloped and with people too used to the super-efficient Shinkansen and hometown carrier All Nippon Airways [NH/ANA], it will take a few years for locals to accept AirAsia Japan (Mk II). Further, the battle has actually already begun, with Jetstar Japan [GK/JJP] having entered the market and expanding (Jetstar Japan starts three routes from Kumamoto.), and ANA retaliating by slashing fares to match them on competing routes. AirAsia Japan (Mk II) probably knows more than anyone else that domestic low-fare is difficult to make it work without a hub in Tokyo, so if prospects of getting Haneda slots diminish, there may not be an incentive to relaunch the Japanese unit after all. Let's wait and see...

Reference: Business Journal, September 10th. (in Japanese)
Reference: Sankei Shimbun, November 23rd. (in Japanese)
Reference: Centre for Aviation, November 24th. (in English)

Saturday, November 22, 2014

Fuji Dream loads Mount Fuji scenic flight.

Fuji Dream Airlines [JH/FDA] will operate a one-off, one-way service from Nagoya/Komaki [NKM/RJNA] to Shizuoka [FSZ/RJNS] on December 3rd. Dubbed Mount Fuji Scenic Flight, the charter operation will depart at 0700 JST, fly over Yaezu City, then approach near Mount Fuji, and move over to Fujinomiya City, before arriving into the World Heritage Site's nearest commercial airport around 0800.

Embraer ERJ170-100STD (E170) JA01FJ Dream Red resting between flights at FDA's Shizuoka hub. Will their ninth aircraft, slated to arrive in March 2015, replace their first? Or will they add new routes? (Photo: Ryosuke Yano)

A 76-seat Embraer ERJ170 (E170) will be assigned, however, FDA is capping the passenger number for the flight to just 19, with each passenger to be allocated an entire row (four seats) to provide the best views of Japan's tallest mountain.

Flight Schedule:
Komaki – Shizuoka charter with E170.
JH5071 NKM 0700 – 0800 FSZ E70 *Dec/3 only.

Price is set at 9,800 JPY per person, including a 1,000 JPY QUO prepaid shopping card gift that would be handed out. Tickets went on sale on November 19th at 0900 and was closed on November 21st at 1500. Travelers needed to be either a friend on FDA's Facebook page or an account holder on FDA's website in order to purchase.

Reference: Fuji Dream Airlines @ Facebook, November 17th. (in Japanese)
Reference: FlightLiner, November 19th. (in Japanese)

Friday, November 21, 2014

Skymark in talks with JAL for broad tie-up.

Skymark Airlines [BC/SKY] has entered into partnership talks with Japan Airlines [JL/JAL] to help save the troubled third largest domestic carrier, according to a Nikkei report. Both sides confirmed the news, though adding nothing has been finalized yet. Under the plan, effective as early as February 2015, JAL would place its code on most, if not all of Skymark's 36 round-trips from Tokyo/Haneda [HND/RJTT] to Fukuoka [FUK/RJFF], Kagoshima [KOJ/RJFK], Kobe [UKB/RJBE], Okinawa/Naha [OKA/ROAH], and Sapporo/New Chitose [CTS/RJCC] and sell roughly 20% of their seats, generating an estimated annual 8 billion JPY for the cash-strapped airline.

Boeing 737-86N(WL) JA73NX arrives into Narita in the final days at the airport. Skymark closed all operations at Narita on October 25th (Skymark announces Narita closure and Yonago cuts.) in a bid to cut unprofitable routes and concentrate on Haneda. (Photo: Ryosuke Yano)

However, JAL would not acquire any stakes in Skymark (at least for now), which would allow them to retain a certain degree of independence. "We take great pride that we have been independent without the help of any major carriers, which has enabled us to change the industry significantly," is a phrase that could often be heard from Shinichi Nishikubo, Skymark's President and CEO. But for JAL too, this is a clever compromise.

Firstly, any new investment by JAL would come under heavy scrutiny of the government, according to the notorious (at least to JAL) document issued by the Japan Civil Aviation Bureau (JCAB) on August 10th, 2012 (the 8-10 Paper), which is effective through FY2016. The government's favor of All Nippon Airways [NH/ANA] over JAL is partly due to the current Liberal Democratic Party (LDP)-controlled regime wanting to portrait the then-Democratic Party of Japan (DPJ)-led government's massive bailout of JAL from their 2010 bankruptcy, one of the nation's most spectacular corporate failures, a misuse of taxpayer's money. Secondly, JAL wouldn't want to take the risk of investing in a company that could bring on a hefty debt; Airbus is seeking up to 700 million USD in penalties for Skymark's termination of the A380 order (Skymark's Airbus A380 order in jeopardy.).

And lastly, JAL does not want to see ANA increasing the share of Haneda slots any more. Slot-count-wise, JAL controls 40.0% at 184.5 slot-pairs and All Nippon Airways [NH/ANA] 37.4% at 172.5 slot-pairs, while Skymark holds 7.8% with 36 slot-pairs. However, if the slots of AIRDO [HD/ADO] (d.b.a. Air Do), Skynet Asia Airways [6J/SNJ] (d.b.a. Solaseed Air), and Star Flyer [7G/SFJ], all of which code-share with ANA throughout their networks and are de facto controlled by Japan's largest carrier (New Star Flyer President is from ANA.), are combined, ANA's share rises to 52.2%. Skymark teaming up with ANA, an idea which the current government favors, would have Japan's largest airline control 60% and JAL 40%. If the JAL/Skymark partnership goes through, JAL could increase the share to 47.8%, which would maintain close competition.

A flock of JAL's Boeings at Haneda. How much competition will remain after the JAL/Skymark partnership? Are we be going back to the ANA/JAL duopoly era? (Photo: Aviation Wire)

After the report, Skymark's stocks soared 50 JPY, over 25%, to 245 JPY on November 21st. But reportedly, the JCAB is already reluctant to approve the cooperation. Although no transaction of cash would be involved, it seems that the regulator sees the partnership as a bailed-out airline still under government supervision virtually aiding another Haneda-based carrier to strengthen its competitiveness. If there's an ownership change exceeding 20% of an airline that controls slots at Haneda, those would need to be relinquished and JCAB would redistribute them. Even just starting a code-share at the heavily-regulated airport requires various approvals. Mr. Nishikubo said "We don't see a reason for them (JCAB) to say no."

Skymark is predicting its worst ever financial record for FY2014 (Skymark braces for 13.7 billion JPY loss in FY2014.), reversing a previous forecast for a 354 million JPY net profit. Total assets stood at 77.5 billion JPY, down 1.3 billion JPY from March this year, while capital-to-asset ration decreased from 56.2% in FY2013 to 49.7%. Cash reserves dwindled to 4.5 billion JPY, down 2.5 billion JPY from just six months ago. They have cited increased costs due to the introduction of the Airbus A330s (Skymark Airlines inaugurates Airbus A330 service.) and now-canceled A380s, continued depreciation of the JPY, fuel costs remaining high, and intensified competition with the LCCs as the primary reasons. Skymark has found itself caught in between the majors and LCCs.

Termination of the A380 order in July and the European planemaker's subsequent seeking for up to 700 million USD in penalties only made their outlook worse. "We are still negotiating to reduce that figure. But we hope to reach an agreement as early as possible," said Mr. Nishikubo (Skymark hopes to settle Airbus A380 penalty in October.). Talks regarding an investment by Malaysia-based AirAsia Group (Is AirAsia considering a Skymark takeover?) had collapsed by the end of summer. With JCAB keeping a close eye and the current government favoring ANA, the JAL partnership probably would not go through easily. But Skymark is fast running out of cash and needs new sources of revenue as quickly as possible. In any case, Skymark may need to forfeit a lot of their independence as Japan's third force.

Reference: Nikkei Shimbun, November 21st. (in Japanese)
Reference: Nikkei Shimbun, November 21st. (in Japanese)
Reference: Aviation Wire, November 21st. (in Japanese) 

*Edited/updated on November 23rd, 2014.

Thursday, November 20, 2014

Airbus A350 makes first appearance in Japan.

On November 19th, Airbus Industrie brought the A350 to Japan for the first time as part of the new airplane's 11-day Asian Demo Tour. A350-941 F-WWYB, the fifth experimental aircraft, landed at Tokyo/Haneda's [HND/RJTT] Runway 34L at 1525 JST after a short hop from Seoul/Gimpo [GMP/RKSS]. Fitted with 42 business (four abreast; 1-2-1) and 223 economy class (nine abreast; 3-3-3) seats, this is the second test airframe to have a fully functional passenger cabin.

JAL staff welcome the first arrival of Airbus A350-941 F-WWYB at Haneda. (Photo: Aviation Wire)

Japan Airlines [JL/JAL] welcomed the European planemaker's newest product at their Haneda hangars, where it will be shown off to related personnel and media. A sightseeing flight will be operated on November 20th for representatives from JAL, Japanese suppliers, and media. It will leave Haneda on November 21st for Hanoi/Noi Bai [HAN/VVNB], followed by visits to Bangkok/Suvarnabhumi [BKK/VTBS] and Kuala Lumpur/International [KUL/WMKK], before returning to Toulouse [TLS/LFBO].

On October 7th, 2013, JAL announced their historical first order (excluding the A300s that merger partner Japan Air System [JD/JAS] acquired) with Airbus for up to 56 A350s. Japan's second largest carrier has 18 A350-900s and 13 larger A350-1000s on firm order, along with 25 options, with deliveries starting in 2019 to replace the entire Boeing 777 fleet by 2025. JAL's 777 fleet currently consists of 13 777-300ERs, seven 777-300s, 11 777-200ERs, and 13 777-200s (three more to be retired in FY2014) (JAL retires first Boeing 777.). 25 787-8s (15 already delivered) and 20 787-9s will also help replace the 777 fleet.

The A350 received airworthiness type certification from the European Aviation Safety Agency (EASA) on September 30th, followed by an approval for 370-minute ETOPS (Extended-range Twin-engined OperationS) on October 15th. It became the first airliner to be approved for ETOPS beyond 180 minutes before entry into service. On November 12th, it received certification from the U.S. Federal Aviation Administration (FAA). Common type rating for pilot training between the A330 has also been granted. First delivery to launch customer Qatar Airways [QR/QTR] is expected before the end of the year.

Reference: Airbus, November 17th. (in English)
Reference: Traicy, November 19th. (in Japanese)
Reference: Aviation Wire, November 19th. (in Japanese)