On August 14th, Skymark Airlines (BC/SKY) announced the first step of realigning their business. The proposed Winter 2014/2015 schedule effective October 26th through December 25th will see the number of direct links cut by six, including a complete withdrawal from Tokyo/Narita (NRT/RJAA) and cuts at Yonago (YGJ/RJOH) (Skymark mulls pull-out from Narita and Yonago.), reducing the total number of routes to 23.
Affected routes from Narita are Okinawa/Naha (OKA/ROAH), Sapporo/New Chitose (CTS/RJCC), and Yonago, while New Chitose and Tokyo/Haneda (HND/RJTT) will be cut from their Yonago focus city. Ibaraki (IBR/RJAH) – Nagoya/Chubu Centrair (NGO/RJGG), which has been seeing the lowest load factor in their network, is also being axed. The two slot-pairs at Haneda will be allocated to Fukuoka (FUK/RJFF) and Kobe (UKB/RJBE), with each receiving one.
Frequency Increases:
Fukuoka – Naha from 3 to 4 daily.
Haneda – Fukuoka from 10 to 11 daily. Airbus A330 operating on 10 round-trips.
Haneda – Kobe from 6 to 7 daily.
Suspensions:
Ibaraki – Chubu Centrair 1 daily.
Narita – Naha 2 daily.
Narita – New Chitose 2 daily.
Narita – Yonago 2 daily.
Yonago – New Chitose 1 daily.
Yonago – Haneda 2 daily.
Load factors from Narita weren't bad, hovering around 65-70%, however, low-season rates dropped to 50-60% last year, and with the Naha and New Chitose routes directly competing with LCCs Jetstar Japan (GK/JJP) and Vanilla Air (JW/VNL), Skymark has had to keep prices down to remain in the race. The Yonago link, though without a competitor, has never been popular. Their shelving of long-haul Airbus A380 plans from Narita (Skymark's Airbus A380 order in jeopardy.) also made domestic operations there, originally aimed at feeding the A380s, redundant. Skymark first landed at Narita on October 30th, 2011.
Yonago, the newest focus city for Japan's third largest airline which was only launched last December, has been observing low load factors around 30-40% for all routes except for Haneda (Skymark commences Sendai – Okinawa.). New Chitose and Haneda have been axed, however, a one-stop through-fare will be offered via their second biggest hub at Kobe. The Yonago – Haneda route sees heavy competition from All Nippon Airways (NH/ANA), which flies five round-trips and slashed fares predatorily to match Skymark after their entry.
The Ibaraki – Chubu Centrair route, which was only started on April 18th (Skymark adds Fukuoka and Nagoya from Ibaraki.), has seen load factors treading around 10-20% ever since launch. Ibaraki, Japan's first and so far only LCC-dedicated airport, will still have non-stop flights to Fukuoka, Kobe, and New Chitose.
Airbus is said to be seeking around 70 billion JPY in penalties for the A380 cancellation, in addition to already-paid deposits amounting to 26.5 billion JPY, which is unlikely to be refunded. The figure is only expected to grow, as Rolls-Royce and interior makers also prepare to seek compensation from Skymark. On the other hand, the airline posted a full-year loss for the first time in five years for FY2013, announcing a 1.8 billion JPY loss. It lost another 5.7 billion JPY only in the first quarter of FY2014, prompting its accountants to report "doubts about its ability to continue as a going concern." Their cash and near-term assets stood at 7.2 billion JPY as of June, and they are desperate for financial support, something they have never asked for in their history.
Skymark's latest strategy tweak also includes a revamp of their fare system, offering prices that vary depending on availability, from October 26th onwards. Fares have also been raised. Its resource deployment will concentrate on its lucrative Haneda slots; increase frequency on trunk routes and bring up utilization of its A330s. However, this doesn't promise good returns; remember Star Flyer? Dumping Haneda slots into trunk routes led to increased passenger volume, but lower load factors and lower yields (Star Flyer to add Yamaguchi-Ube; but reduce Fukuoka.). I certainly hope they survive; ANA and JAL have no mercy in slashing fares when Skymark enters, but also notorious for bringing fares back up high in markets Skymark has exited.
Reference: Aviation Wire, August 14th. (in Japanese)
*Post edited/updated on August 19th.
 |
| Boeing 737-8HX JA737N at Tokyo's Haneda. It will be returned to lessor ACG in May 2015. All three remaining non-winglet 737s will be withdrawn from service by October 2015, reducing the 737 fleet to 27. (Photo: Ryosuke Yano) |
Affected routes from Narita are Okinawa/Naha (OKA/ROAH), Sapporo/New Chitose (CTS/RJCC), and Yonago, while New Chitose and Tokyo/Haneda (HND/RJTT) will be cut from their Yonago focus city. Ibaraki (IBR/RJAH) – Nagoya/Chubu Centrair (NGO/RJGG), which has been seeing the lowest load factor in their network, is also being axed. The two slot-pairs at Haneda will be allocated to Fukuoka (FUK/RJFF) and Kobe (UKB/RJBE), with each receiving one.
Frequency Increases:
Fukuoka – Naha from 3 to 4 daily.
Haneda – Fukuoka from 10 to 11 daily. Airbus A330 operating on 10 round-trips.
Haneda – Kobe from 6 to 7 daily.
Suspensions:
Ibaraki – Chubu Centrair 1 daily.
Narita – Naha 2 daily.
Narita – New Chitose 2 daily.
Narita – Yonago 2 daily.
Yonago – New Chitose 1 daily.
Yonago – Haneda 2 daily.
Load factors from Narita weren't bad, hovering around 65-70%, however, low-season rates dropped to 50-60% last year, and with the Naha and New Chitose routes directly competing with LCCs Jetstar Japan (GK/JJP) and Vanilla Air (JW/VNL), Skymark has had to keep prices down to remain in the race. The Yonago link, though without a competitor, has never been popular. Their shelving of long-haul Airbus A380 plans from Narita (Skymark's Airbus A380 order in jeopardy.) also made domestic operations there, originally aimed at feeding the A380s, redundant. Skymark first landed at Narita on October 30th, 2011.
Yonago, the newest focus city for Japan's third largest airline which was only launched last December, has been observing low load factors around 30-40% for all routes except for Haneda (Skymark commences Sendai – Okinawa.). New Chitose and Haneda have been axed, however, a one-stop through-fare will be offered via their second biggest hub at Kobe. The Yonago – Haneda route sees heavy competition from All Nippon Airways (NH/ANA), which flies five round-trips and slashed fares predatorily to match Skymark after their entry.
The Ibaraki – Chubu Centrair route, which was only started on April 18th (Skymark adds Fukuoka and Nagoya from Ibaraki.), has seen load factors treading around 10-20% ever since launch. Ibaraki, Japan's first and so far only LCC-dedicated airport, will still have non-stop flights to Fukuoka, Kobe, and New Chitose.
Airbus is said to be seeking around 70 billion JPY in penalties for the A380 cancellation, in addition to already-paid deposits amounting to 26.5 billion JPY, which is unlikely to be refunded. The figure is only expected to grow, as Rolls-Royce and interior makers also prepare to seek compensation from Skymark. On the other hand, the airline posted a full-year loss for the first time in five years for FY2013, announcing a 1.8 billion JPY loss. It lost another 5.7 billion JPY only in the first quarter of FY2014, prompting its accountants to report "doubts about its ability to continue as a going concern." Their cash and near-term assets stood at 7.2 billion JPY as of June, and they are desperate for financial support, something they have never asked for in their history.
Skymark's latest strategy tweak also includes a revamp of their fare system, offering prices that vary depending on availability, from October 26th onwards. Fares have also been raised. Its resource deployment will concentrate on its lucrative Haneda slots; increase frequency on trunk routes and bring up utilization of its A330s. However, this doesn't promise good returns; remember Star Flyer? Dumping Haneda slots into trunk routes led to increased passenger volume, but lower load factors and lower yields (Star Flyer to add Yamaguchi-Ube; but reduce Fukuoka.). I certainly hope they survive; ANA and JAL have no mercy in slashing fares when Skymark enters, but also notorious for bringing fares back up high in markets Skymark has exited.
Reference: Aviation Wire, August 14th. (in Japanese)
*Post edited/updated on August 19th.
No comments:
Post a Comment