Solaseed Air bids farewell to the Boeing 737-400.

On September 29th, Skynet Asia Airways (6J/SNJ), doing business as Solaseed Air, retired the Boeing 737-400. The last revenue flight was 6J022, departing Kumamoto (KMJ/RJFT) at 1900 JST and touching down at Tokyo/Haneda (HND/RJTT) at 2022 with a load of 136 passengers, three flight attendants, and two pilots. It was operated by 737-46M JA392K. Passengers were handed out last-flight certificates, magnets, and stickers.

Boeing 737-46Q JA737B at Nagasaki. She became the penultimate 737-400 in the fleet, operating its last flight on September 23rd as 6J034 from Nagasaki to Haneda. (Photo: Ryosuke Yano)

The second variant of the new generation 'Baby Boeing' was the first type to be flown by the airline when they launched operations on August 1st, 2002 as the third child of Japan's deregulation with a Haneda – Miyazaki (KMI/RJFM) service. Skynet Asia has since flown a dozen different 737-400s, operating 10 at peak time between July 2010 and April 2012. However, the introduction of the 737-800 in July 2011, which coincided with their re-branding into Solaseed Air, marked the gradual transition to the Next-Generation 737.

Boeing 737-4Y0 JA391K in Skynet Asia Airways' original livery. It was retired in April 2012. ANA owns a 8.56% minority stake in the Miyazaki-based carrier, but maintains a much greater near-subsidiary influence. (Photo: Ryosuke Yano)

Last year, I had the opportunity to fly on JA737B (CoachFlyer 6J034: NGS - HND on Solaseed Air's Boeing 737.), which was retired six days earlier. With fleet modernization now complete, Solaseed Air's average fleet age will be reduced to just 1.75 years. It operates 11 737-800s, with the 12th due in May 2015. Japan Transocean Air (NU/JTA) is now the sole and last Japanese operator of the 737-400 with a dozen, though that fleet too will be replaced by 737-800s starting in January 2016 (JTA finalizes order for 12 Boeing 737-800s.).

Reference: FlightLiner, September 29th. (in Japanese)

Jetstar Japan surpasses 6 million passengers.

On September 24th, Jetstar Japan (GK/JJP) carried their 6 millionth passenger. The Tokyo/Narita (NRT/RJAA)-based carrier, which started operations on July 3rd, 2012 with routes to Fukuoka (FUK/RJFF) and Sapporo/New Chitose (CTS/RJCC), reached the latest milestone in 813 days, the fastest for a Japanese LCC.

Airbus A320-232 JA04JJ takes off from Matsuyama. (Photo: Jetstar Japan)

From the Winter 2014/2015 timetable, Jetstar Japan will operate up to 104 daily flights covering 11 domestic destinations with 18 routes (Jetstar Japan to launch Kumamoto with three routes.). Their long-awaited second hub at Osaka/Kansai (KIX/RJBB) was finally launched on June 12th (Jetstar Japan launches Kansai hub.) and regional international routes are expected from early 2015. Although their fleet of Airbus A320s had been capped at 18 due to lack of maintenance personnel, it will be on expansion mode again with three new examples to be delivered by the end of this year.

The 1 million mark was passed on March 22nd, 2013 (262 days), 2 million on August 12th (405 days), 2013, 3 million on December 6th, 2013 (521 days), 4 million on March 24th, 2014 (629 days), and 5 million on July 6th (733 days) (Jetstar Japan carries 5 millionth passenger.). The Japanese unit of the Australian-born brand is owned 33.3% by Qantas Airways (QF/QFA), 33.3% by Japan Airlines (JL/JAL), 16.7% by Mitsubishi, and 16.7% by Century Tokyo Leasing.

Reference: Jetstar Japan, September 25th. (in Japanese)

Spring Japan reduces schedule for Winter 2014/2015.

Spring Airlines Japan (IJ/SJO) has released their Winter 2014/2015 timetable effective October 26th. Their planned increase of Tokyo/Narita (NRT/RJAA) – Takamatsu (TAK/RJOT) service to two daily round-trips has been postponed, and their current double-daily Narita – Saga (HSG/RJFS) link will be reduced to once-daily. Meanwhile, all flights, including to Hiroshima (HIJ/RJOA), are being re-timed.

Boeing 737-86N(WL) JA03GR passing through Honolulu on delivery in March 2014. The aircraft is leased from GECAS. (Photo: HNL RareBirds)

The fledgling Narita-based LCC, which just launched operations on August 1st (Spring Airlines Japan commences operations.), cites Saga not being able to accept the airline's desired time as the main reason for the frequency cut, while also noting their inability to sustain their current utilization rates. However, the new timetable leaves just four daily round-trips for a trio of Boeing 737-800s. Is there a lack of staff?

Flight Schedule (Oct/25/2014 - Mar/28/2015):
Narita – Hiroshima 2 daily with 737-800.
IJ621 NRT 0845 – 1030 HIJ 73H Daily
IJ623 NRT 1655 – 1840 HIJ 73H Tu/Th
IJ623 NRT 1725 – 1910 HIJ 73H Mo/Sa
IJ623 NRT 1730 – 1915 HIJ 73H We/Fr/Su 
IJ622 HIJ 1115 – 1235 NRT 73H Daily
IJ624 HIJ 1925 – 2045 NRT 73H Tu/Th
IJ624 HIJ 1955 – 2115 NRT 73H Mo/Sa
IJ624 HIJ 2000 – 2120 NRT 73H We/Fr/Su

Narita – Saga reduced from 2 to 1 daily with 737-800.
IJ603 NRT 1420 – 1650 HSG 73H Daily
IJ604 HSG 1735 – 1910 NRT 73H Daily

Narita – Takamatsu 1 daily with 737-800. Planned 2nd daily postponed.
IJ613 NRT 1230 – 1410 TAK 73H Daily
IJ614 TAK 1455 – 1610 NRT 73H Mo/Tu/Th/Fr/Sa/Su
IJ614 TAK 1515 – 1630 NRT 73H We

Spring Airlines Japan is the Japanese unit of China's largest LCC Spring Airlines (9C/CQH). Japanese largest travel agency JTB also holds a minority interest. Flights were originally planned for May, however, paperwork delays and crew training taking more time forced them to postpone their launch twice (Spring Airlines Japan delays launch to August 1st.).

Although they haven't released load factors, the figures are estimated to be lower than the target line of 70% (breakeven is probably around 75 - 80%), especially for the Saga and Takamatsu routes. It was reportedly considering its fourth domestic destination in early 2015, and plans call for five aircraft to be added each year from next year, but can they keep up with their ambitions?

Reference: Spring Airlines Japan, September 25th. (in Japanese)

JAL Boeing 767 encounters turbulence near Seoul.

On September 12th around 1730 KST (no time difference with JST), Japan Airlines' (JL/JAL) flight JL093, service from Tokyo/Haneda (HND/RJTT) to Seoul/Gimpo (GMP/RKSS), encountered sudden rough air as it was descending to its destination. Although no injuries were reported among the passengers, seven flight attendants sustained minor injuries.

Sistership Boeing 767-346/ER JA613J awaits its next assignment at Haneda. (Photo: Ryosuke Yano)

The aircraft involved was Boeing 767-346/ER JA654J, which had departed Haneda at 1535 JST with a load of 218 passengers, including three children, 10 flight attendants, and two pilots. As the 767 was descending to Gimpo, at 4,900 meters (16,000 feet) it experienced what was likely caused by wake turbulence approximately 25 minutes prior to landing, about 95 kilometers southeast of Seoul's airport near downtown. The aircraft landed safely at 1759, four minutes behind schedule.

Of the seven injured cabin crew, one was diagnosed of neck and back sprain which required two weeks of rest and treatment. The Japan Civil Aviation Bureau (JCAB) designates any event that results in injuries requiring treatment for over 48 hours an aviation accident, so this case fell under that category. However, South Korea, which has the authority to investigate the matter as it happened in Korean airspace, is not considering this an accident. 

Reference: Aviation Wire, September 17th. (in Japanese)

Vanilla Air works out details for Hong Kong and Kaohsiung.

On September 10th, Vanilla Air (JW/VNL) announced the timetable for their new routes from the Tokyo/Narita (NRT/RJAA) hub to Hong Kong (HKG/VHHH) and Kaohsiung (KHH/RCKH) (Vanilla Air announces Hong Kong and Kaohsiung.), which will be commenced from November 2nd, 2014 and February 1st, 2015, respectively.

Airbus A320-216(SL) JA01VA at Narita. Three brand-new sharklet-equipped A320s will be delivered between September and November, allowing them to phase-out the 166-seat secondhand former ANA A320s. Two more will be delivered in early 2015 to allow for the Hong Kong frequency increase and Kaohsiung inauguration. (Photo: Vanilla Air)

The wholly-owned LCC subsidiary of ANA Holdings, parent of All Nippon Airways (NH/ANA), will start Hong Kong service with three weekly round-trips, which will gradually be increased to daily from February 1st and double daily from February 21st. One of the two daily will be a red-eye flight. Meanwhile, the Kaohsiung route will be served daily from February 1st. It will be the second destination Vanilla Air serves in Taiwan after Taipei/Taoyuan (TPE/RCTP).

"Japan is seeing a growing number of tourists from Asia. Visitor numbers from Hong Kong and Taiwan have been recording the month's highest for 18 months in a row, and we're very pleased to announce the new routes. As the first LCC serving the two cities from Narita, my heart is filled with new ambitions," said Tomonori Ishii, President of Vanilla Air.

Flight Schedule:
Narita – Hong Kong NEW 3 weekly with A320-200.
JW311 NRT 0750 – 1150 HKG 32A Tu *2014/Nov/2 - Dec/31.
JW311 NRT 0945 – 1345 HKG 32A Th *2014/Nov/2 - Dec/31.
JW311 NRT 0910 – 1310 HKG 32A Su *2014/Nov/2 - Dec/31.
JW311 NRT 0735 – 1150 HKG 32A Tu *2015/Jan/1 - 31.
JW311 NRT 0930 – 1345  HKG 32A Th *2015/Jan/1 - 31.
JW311 NRT 0855 – 1310 HKG 32A Su *2015/Jan/1 - 31.
JW312 HKG 1245 – 1740 NRT 32A Tu *2014/Nov/2 - Dec/31.
JW312 HKG 1445 – 1940 NRT 32A Th *2014/Nov/2 - Dec/31.
JW312 HKG 1410 – 1905 NRT 32A Su *2014/Nov/2 - Dec/31.
JW312 HKG 1245 – 1730 NRT 32A Tu *2015/Jan/1 - 31.
JW312 HKG 1445 – 1930 NRT 32A Th *2015/Jan/1 - 31.
JW312 HKG 1410 – 1900 NRT 32A Su *2015/Jan/1 - 31.

Narita – Hong Kong increase from 3 weekly to 1 daily with A320-200. *2015/Feb/1 - 21.
JW311 NRT 0855 – 1310 HKG 32A Mo
JW311 NRT 0735 – 1150 HKG 32A Tu
JW311 NRT 0805 – 1220 HKG 32A We/Fr
JW311 NRT 0930 – 1345 HKG 32A Th
JW311 NRT 0825 – 1240 HKG 32A Sa
JW311 NRT 0855 – 1310 HKG 32A Su
JW312 HKG 1410 – 1900 NRT 32A Mo
JW312 HKG 1245 – 1730 NRT 32A Tu
JW312 HKG 1320 – 1805 NRT 32A We/Fr
JW312 HKG 1445 – 1930 NRT 32A Th
JW312 HKG 1340 – 1825 NRT 32A Sa
JW312 HKG 1410 – 1900 NRT 32A Su

Narita – Hong Kong increase from 1 to 2 daily with A320-200. *2015/Feb/21 - Mar/28.
JW311 NRT 0855 – 1310 HKG 32A Mo
JW311 NRT 0735 – 1150 HKG 32A Tu
JW311 NRT 0805 – 1220 HKG 32A We/Fr
JW311 NRT 0930 – 1345 HKG 32A Th
JW311 NRT 0825 – 1240 HKG 32A Sa
JW311 NRT 0855 – 1310 HKG 32A Su
JW315 NRT 2100 – 0155(+1) HKG 32A Mo
JW315 NRT 2055 – 0135(+1) HKG 32A Tu
JW315 NRT 2055 – 0115(+1) HKG 32A We/Th/Fr/Sa/Su
JW310 HKG 0200 – 0645 NRT 32A Mo/Fr/Sa/Su *From 2015/Feb/22.
JW310 HKG 0220 – 0705 NRT 32A Tu/We/Th *From 2015/Feb/22.
JW312 HKG 1410 – 1900 NRT 32A Mo
JW312 HKG 1245 – 1730 NRT 32A Tu
JW312 HKG 1320 – 1805 NRT 32A We/Fr
JW312 HKG 1445 – 1930 NRT 32A Th
JW312 HKG 1340 – 1825 NRT 32A Sa
JW312 HKG 1410 – 1900 NRT 32A Su

Narita – Kaohsiung NEW 1 daily with A320-200.
JW121 NRT 1145 – 1520 KHH 32A Daily *2015/Feb/1 - Mar/28.
JW122 KHH 1600 – 2025 NRT 32A Daily *2015/Feb/1 - Mar/28.

The Narita – Hong Kong route is currently only served by full-service carriers (FSCs) including ANA, Cathay Pacific Airways (CX/CPA), Delta Air Lines (DL/DAL) (final service on October 24th), and Japan Airlines (JL/JAL), however, Hong Kong-based LCC Hong Kong Express Airways (UO/HKE) (d.b.a. HK Express) runs a daily round-trip to and from Haneda (HND/RJTT), Tokyo's preferred airport, and plans are underway to launch a daily Narita service from March next year.

Vanilla Air's one-way fares to Hong Kong will start from 8,000 JPY and Kaohsiung from 7,000 JPY, excluding processing and airport fees. Reservations will start tomorrow at 1400 JST September 11th. With the new routes, the fledgling LCC's network will grow to four international and three domestic destinations. Other cities under consideration include Guam, Macau, Saipan, and Taichung.

Reference: Vanilla Air, September 10th. (in Japanese)

Skymark's fate: MLIT discourages foreign investment.

Follow-up from Skymark's fate: AirAsia, ANA, Delta, or...?

Seeing reports of an investment in Skymark Airlines (BC/SKY) by the AirAsia Group circulating (Is AirAsia considering a Skymark takeover?), a senior official of the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT) has told that if there is a significant ownership structure change, their precious slots at Tokyo/Haneda (HND/RJTT) would have to be returned to the MLIT for redistribution over all carriers.

"Haneda slots are prized properties that belong to the Japanese public. We gave Skymark slots as part of a scheme to promote young airlines. But if they declare bankruptcy, the MLIT will collect all of their slots. If there is a significant ownership structure change, we would view the airline as a different company, so the slots would also have to be returned to us and we would consider a reallocation process," the source said.

Airbus A330-343E JA330B. Skymark currently has three, with seven more to arrive by September 2015. All will be deployed on their lucrative Haneda domestic routes. They are also pushing the MLIT to grant night-time international slots at Haneda for flights to Hawaii, Singapore, and Thailand using the A330. (Photo: Ryosuke Yano)

The MLIT rule says that if a carrier owns more than 20% of another airline that holds Haneda slots, those slots must be relinquished and redistributed, but the above statement in response to the AirAsia rumor tells that overseas airlines are no exception. This almost rules out foreign investment; AirAsia Group would probably want managerial control (and a re-brand as well) and now that would be impossible, and it would also be a questionable use of cash for Delta Air Lines (DL/DAL), which is currently concentrating on raising its investor value.

So who now? Under the so-called '8-10 Paper' (released on August 10th, 2013), Japan Airlines (JL/JAL) is still required to submit all investment and route plans to the government for monitoring and evaluation before they go ahead, so that leaves All Nippon Airways (NH/ANA) as the only cash-rich option. Some internet-based travel firms have also been named as possible contenders as well, but nothing more has come out yet, and many believe the MLIT currently favors an ANA investment in Skymark. Wanting to portrait JAL's bailout by the previous government (Democratic Party of Japan) as a failure, the current (Liberal Democratic Party) has been putting ANA first.

When domestic slot-pairs at Haneda were increased by 25 in March 2013, ANA received eight, Air Do (HD/ADO) two, Skynet Asia Airways (d.b.a. Solaseed Air) (LQ/SNJ) three, Star Flyer (7G/SFJ) five, while Skymark was awarded four and JAL only three. But with ANA virtually controlling Air Do, Solaseed, and Star Flyer and code-sharing and coordinating schedules, they essentially got 18 slot-pairs. For international slot-pairs that were awarded in March 2014, ANA received 11 (ANA's Summer 2014 international expansion.) while JAL only five.

Boeing 777-281 JA8968 arrives at Okinawa's Naha Airport. (Photo: Ryosuke Yano)

On the other hand, after JAL placed its historical first Airbus order for up to 56 A350 XWBs, the government is said to have asked ANA to order the Boeing 777X (ANA selects Boeing 777-9X and Airbus A321neo.) to save the U.S. ally's face. This was probably one of the reasons for the order, though obviously not the only one, along with Boeing offering much more aggressive discounts and the Japanese aerospace industry pressing to order Boeing products. Initially, ANA was also leaning towards the A350. The government has since ordered a pair of 777-300ERs to replace the nation's aging two 747-400s used to transport government VIPs and the imperial family, and they will switch its maintenance contract from JAL to ANA in 2019 when the aircraft are delivered.

But, we all know that a Skymark investment by ANA would give Japan's now largest carrier too much power. It would be detrimental to the flying public as there would be no 'third force' at Haneda, Japan's largest and most important market, to challenge the ANA/JAL duopoly. And we could potentially be going back to an age of high ticket prices. Narita has a growing portfolio of LCCs, but most of the public still prefer convenient Haneda for domestic travel.

On the other hand, on September 5th, Skymark's President and CEO Shinichi Nishikubo promised the Governor of Tottori Prefecture that Haneda – Yonago (YGJ/RJOH) would be resumed from the Summer 2015 schedule. They only recently announced the axing of the unprofitable route as part of their restructuring (Skymark announces Narita closure and Yonago cuts.), so this is peculiar. Is there a prospect for a potential major investor willing to respect Skymark's independence and Mr. Nishikubo's leadership?

Anyway, backroom politicking is probably already well underway, but everyone will likely keep their mouths closed, at least until Skymark settles on a penalty price with Airbus for the A380 cancellation (Skymark's Airbus A380 order in jeopardy.), which is expected by October. The European planemaker is reportedly calling for 70 billion JPY, in addition to the 26.5 billion JPY of prepaid deposits that will not be refunded. Stay tuned.

Reference: Jiji Press, September 5th. (in Japanese)
Reference: J-Cast, September 6th. (in Japanese)

Mitsubishi mulls launching feeder airline.

On September 4th, Mitsubishi and group company Mitsubishi Heavy Industries, along with Japan Tourism Marketing, a wholly-owned subsidiary of Japan's largest travel agency JTB, University of Tokyo, Development Bank of Japan, Ministry of Land, Infrastructure, Transport, and Tourism (MLIT), and others held the first meeting of a committee aiming at launching a new commuter airline that would fly regional jets to serve rural routes. Officials from All Nippon Airways (NH/ANA) and Japan Airlines (JL/JAL) were invited as well.

Prototype Mitsubishi MRJ90 JA21MJ inside their factory at Nagoya's Komaki. Official roll-out is planned for October 18th with first flight to take place in spring 2015. (Photo: Mitsubishi)

The Committee for Next Generation Community Airline Network calls for the new carrier to fly the Mitsubishi Regional Jet (MRJ) family to connect existing major hubs, rural cities, and regional international destinations in China and South Korea on behalf of major carriers ANA, JAL, and overseas airlines. Members believe that operating the fuel-efficient MRJ on a platform to commonly feed all the major carriers would enable them to cut costs and offer lower fares that would lead to "revitalizing underutilized rural airports," according to Yuichi Hiromoto, the Mitsubishi executive heading the group.

Similar to the model common in the U.S., the new airline would be a feeder carrier for the majors and would not be selling tickets on their own. However, current laws in Japan do not allow the operating airline and the ticket-selling company to be different corporations, so the committee will ask the MLIT to ease the rules. Japan is targeting 20 million annual visitors by the 2020 Tokyo Olympics/Paralympics, and the new airline would offer a cost-effective alternative to Tokyo's congested Haneda (HND/RJTT) and Narita (NRT/RJAA) airports, members say. Operations are targeted as early as 2017, when the first MRJ is delivered to launch customer ANA, which has 25 on order. 

Although plagued by delays, the prototype MRJ will finally be rolled out on October 18th at Mitsubishi's plant at Nagoya/Komaki (NKM/RJNA), with first flight slated for April or May 2015. Along with ANA, JAL also recently became a customer (JAL orders 32 Mitsubishi MRJs and 27 Embraer E-Jets.), ordering 32 for deliveries starting in 2021. Powered by Pratt & Whitney's PurePower PW1200G series geared turbofan engines, the MRJ family consists of the 78-seat MRJ70, which can fly 3,380 kilometers (2,100 miles), and the 92-seat MRJ90, with a 3,310-kilometer (2,050 miles) range. It is Japan's first commercial airliner since the NAMC YS-11 was introduced in 1965.

Reference: Nikkei Shimbun, September 2nd. (in Japanese)
Reference: NHK, September 5th. (in Japanese)

JAL reveals Winter 2014/2015 international plans.

On September 5th, Japan Airlines (JL/JAL) announced their Winter 2014/2015 schedule effective October 26th. As rumored before, Osaka/Kansai (KIX/RJBB) – Los Angeles (LAX/KLAX) will be resumed (JAL to resume Kansai – Los Angeles in Winter 2014/2015.) on March 20th, but also Nagoya/Chubu Centrair (NGO/RJGG) – Bangkok/Suvarnabhumi (BKK/VTBS), which restarts from December 20th.

Boeing 787-8 JA825J takes off from Tokyo's Haneda Airport. (Photo: Aviation Wire)

In line with the award-winning product updates with the Sky Suite 777 and 767 (JAL adding more Sky Suite destinations.), Japan's second largest carrier will also introduce Sky Suite configuration on the Dreamliner, dubbed 'Sky Suite 787', starting with their 16th 787-8, JA837J. Premium economy will be introduced on the 787-8, reducing the seat-count from 186 (42 business and 144 economy) to 161 seats (38 business, 35 premium economy, and 88 economy). Economy will retain eight abreast (2-4-2), going against the worldwide trend of nine abreast and clearly differentiating themselves from ANA.

It will enter service on Tokyo/Narita (NRT/RJAA) – Frankfurt/Main (FRA/EFFD) on December 1st, while Narita – New York/John F. Kennedy (JFK/KJFK) would be the second route to see the product from January 1st. Stretched 787-9s, the first handover of which is planned for early 2015, will also be configured in the Sky Suite layout from delivery, but whether to reconfigure earlier 787-8s is still under consideration.

New Routes/Resumptions (INTERNATIONAL):
Nagoya/Chubu Centrair – Bangkok/Suvarnabhumi NEW 1 daily with 787-8. *From 2014/Dec/20.
JL737 NGO 1030 – 1450 BKK 788 Daily *Operated with 767-300ER Dec/20-31.
JL738 BKK 2255 – 0620(+1) NGO 788 Daily *Operated with 767-300ER Dec/20-31.

Osaka/Kansai – Los Angeles NEW 1 daily with 787-8. *From 2015/Mar/20.
JL060 KIX 1520 – 0920 LAX 788 Daily *Mar/20-28.
JL060 KIX1740 – 1200 LAX 788 Daily *From Mar/29.
JL069 LAX 1120 – 1550(+1) KIX 788 Daily *Mar/20-28.
JL069 LAX1430 – 1900(+1) KIX 788 Daily *From Mar/29.

Equipment Changes (INTERNATIONAL):
Nagoya/Chubu Centrair – Shanghai/Pudong 737-800 replaces 767-300ER.
Osaka/Kansai – Bangkok/Suvarnabhumi 787-8 replaces 767-300ER. *From Dec/1.
Tokyo/Haneda – Bangkok/Suvarnabhumi JL033/032 777-200ER replaces 767-300ER. *From Dec/1.
Tokyo/Haneda – Beijing 787-8 replaces 767-300ER.
Tokyo/Haneda – San Francisco 777-300ER replaces 787-8. *From Dec/1.
Tokyo/Haneda – Taipei/Songshan JL097/098 777-200ER replaces 767-300ER. *From Dec/1.
Tokyo/Narita – Bangkok/Suvarnabhumi JL707/708 787-8 replaces 767-300ER. *From Dec/1.
Tokyo/Narita – Beijing JL869/860 737-800 replaces 767-300ER.
Tokyo/Narita – Delhi/Indira Gandhi 787-8 replaces 777-200ER. *From Dec/1.
Tokyo/Narita – Manila/Ninoy Aquino JL741/742 787-8 replaces 767-300ER. *From Dec/1.
Tokyo/Narita – Shanghai/Pudong JL877/874 737-800 replaces 767-300ER.
Tokyo/Narita – Sydney 777-300ER replaces 777-200ER. *From Dec/1.
Tokyo/Narita – Taipei/Taoyuan JL809/802 767-300ER replaces 737-800.

Frequency Reductions (INTERNATIONAL):
Tokyo/Narita – Moscow/Domodedovo from 4 to 3 weekly.
Tokyo/Narita – Seoul/Incheon from 2 to 1 daily, 767-300ER replaces 737-800.

Kansai – Los Angeles was suspended in October 2006, while Chubu Centrair – Bangkok/Suvarnabhumi was axed in October 2010. JAL has been saying that improving financial results and a recovering economy plus the availability of fuel-efficient aircraft (787s) are having the company consider restarting international routes from cities other than Tokyo, notably Osaka and Nagoya. JAL earlier announced timetable changes for Winter 2014/2015 in July (JAL re-times international flights in Winter 2014/2015.), while domestic plans were announced last month (JAL to terminate Narita – Okinawa.).

Reference: Japan Airlines, September 5th. (in Japanese)
Reference: Japan Airlines, September 5th. (in Japanese)

Skymark's fate: AirAsia, ANA, Delta, or...?

Skymark Airlines (BC/SKY) is facing the most difficult point in their 16-year history that saw itself become the only child of deregulation to successfully crack the ANA/JAL duopoly of Japanese skies.

Increased competition with LCCs as well as the majors lowering prices, coupled with a depreciated JPY, high fuel bills, and costs from introducing the A330 (Skymark Airlines inaugurates Airbus A330 service.) and A380, it tumbled to a full-year loss for the first time in five years for FY2013, posting a 1.8 billion JPY loss. Serious cash flow issues surfaced when Airbus canceled Skymark's A380 order (Skymark's Airbus A380 order in jeopardy.) in July after pre-payments had not been made since April. The European planemaker is said to be seeking 70 billion JPY in penalties, 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.

Skymark Airlines Boeing 737-8HX(WL) JA73NH taxiing at Fukuoka. (Photo: Ryosuke Yano)

As if that weren't enough, they posted a whopping 5.7 billion JPY loss only in the first quarter of FY2014 (Skymark posts 5.7 billion JPY loss for 1Q FY2014.), prompting accountants to report "doubts about its ability to continue as a going concern." As of June, Skymark's cash and near-term assets stood at 7.2 billion JPY. Although officials at Japan's third largest carrier say "Negotiations with Airbus are still continuing," with cash reserves dwindling, it is widely expected that when Airbus decides on the final amount would be when Skymark could declare insolvency.

Skymark is quickly implementing a turnaround plan; increasing utilization of its A330s, axing unprofitable routes (Skymark announces Narita closure and Yonago cuts.), and raising fares. However, those will take some time to help their balance sheet. Their hands-on and charismatic President and CEO Shinichi Nishikubo has continued to say "We'll try to survive on our own," but it is probably most obvious to him that that is very difficult in this situation, if not impossible.

So what are their choices? There are three; (1) receive loans from banks, (2) get bailed out by a government-managed fund, or (3) receive investment from other airlines.

Thai AirAsia Airbus A320-216 HS-ABS loads passengers at Trang. (Photo: Ryosuke Yano)

(1) is what Skymark is hoping for, but unfortunately, unlikely. The airline took pride in not borrowing any cash from financial institutions in their history, but that is a double-edged sword. It also means they don't have any rapport with banks. Will any financial firms be willing to take the risk now? Probably not.

(2) is unlikely as well. The current Liberal Democrat Party (LDP)-controlled government wants to portrait the bailout of Japan Airlines (JL/JAL) by then Democrat Party of Japan (DPJ) regime a failure and misuse of taxpayers' money. Hence the government's favor of ANA in allocating precious slots at Haneda, while JAL continues to be monitored by the government and any significant financial moves by the airline would come under scrutiny. So a government-funded restructuring is out of the picture.

That leaves (3) as the only choice. But who? Without question, Skymark's most valuable assets are the 36 slot-pairs at heavily-regulated Tokyo/Haneda (HND/RJTT), the preferred airport serving the nation's capital. AirAsia Group, ANA Holdings, and Delta Air Lines (DL/DAL) have been reported as contenders, or at least companies considering the investment.

Delta Air Lines Airbus A330-223 N860NW awaits its next flight at Narita. (Photo: Ryosuke Yano)

AirAsia is amidst setting up their new Japan venture (AirAsia Japan is officially reborn; first flight June 2015.) with a base at Nagoya/Chubu Centrair (NGO/RJGG) (AirAsia Japan selects Nagoya Chubu Centrair.), but they want to set up a hub in the Kanto (Greater Tokyo) region as well, and Haneda slots are being sought for. Although AirAsia Group's CEO Tony Fernandes quickly denied rumors (Is AirAsia considering a Skymark takeover?), they are reportedly carrying out due diligence. Rakuten, 18% owner of AirAsia Japan (Mk II), has President Hiroshi Mikitani, who is a member of the government's Economic Revitalization Committee and also has personal relationships with Prime Minister Shinzo Abe. However, it is still unclear whether the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT), who manages the slots, would allow Skymark to retain the 36 slot-pairs even after a major ownership structure change. Furthermore, the current government does not seem to be comfortable enough to give out Haneda slots to LCCs, let alone a foreign-born LCC.

Not much has been talked about an investment by Delta. The expanding international network at Haneda and the government's dual-hub strategy for Tokyo has hurt Delta's Tokyo/Narita (NRT/RJAA) hub, as the SkyTeam member does not have the partnership rivals American Airlines (AA/AAL) and United Airlines (UA/UAL) enjoy with their joint-venture (JV) counterparts JAL and ANA. Delta does have a very limited agreement with Skymark, where Delta's Skymiles could be redeemed for Skymark tickets. Haneda has nine unallocated daytime international slot-pairs (Haneda's expanded International Terminal.), which are thought to be for U.S. flights, but the authorities have yet to reach a deal. Delta is said to be behind the lobbying, as opening up more trans-Pacific flights at Haneda would further put stand-alone Delta at a disadvantage. A comprehensive partnership with Skymark could change the picture. But again, even though foreign ownership is capped at 33%, the government may still not favor a foreign airline having some control over domestic slots at Haneda.

All Nippon Airways Boeing 767-381 JA8324 taxies at Tokyo's Haneda. (Photo: Ryosuke Yano)

ANA is probably the government's favorite, and informal talks are already said to be taking place between them. ANA is rich with cash reserves, but investment would be capped at 20%. The MLIT rule says that if a major carrier owns more than 20% of another airline that holds Haneda slots, those slots must be relinquished and redistributed. However, this has become a law only on paper, as ANA has cleverly kept its investments in Air Do (HD/ADO), Skynet Asia Airways (LQ/SNJ) (d.b.a. Solaseed Air), and Star Flyer (7G/SFJ) under 20% but effectively de facto controls them by installing ANA veterans in the management (New Star Flyer President is from ANA.). Relegating Skymark to a feeder carrier for ANA would virtually eliminate the 'third force', which would result in Japan going back to the ANA/JAL duopoly era (at least at Haneda) and the return of overpriced tickets. Foreign investment, whether from AirAsia or Delta, would assure competition and benefit consumers.

Mr. Nishikubo reiterates "Skymark's meaning of existence lies in that we are independent," and that is very, very true. Skymark brought airfares down, stimulated demand, and radically changed the market. But their independence is now in serious doubt. Cash is running low and a decision would probably need to be made by autumn. So essentially, the ball is not in AirAsia, ANA, or Delta's hands, but in the government's. Stay tuned.

Follow-up at Skymark's fate: MLIT discourages foreign investment.

*Edited/updated on 2014/Sep/8.

ANA maintains Nagoya – Shanghai in Winter 2014/2015.

On September 2nd, All Nippon Airways (NH/ANA) announced that they would maintain their Nagoya/Chubu Centrair (NGO/RJGG) – Shanghai/Pudong (PVG/ZSPD) service after October 26th, the beginning of the Winter 2014/2015 schedule. The once-daily round-trip will continue to see the 120-seat (8 business and 112 economy) Boeing 737-700 being deployed.

Boeing 737-881(WL) JA67AN taxies at Haneda. Although ANA flies the 737-700 on both domestic and international flights, the larger 737-800s are only used for domestic operations. (Photo: Ryosuke Yano)

Until now operated as a summer seasonal service, times will be changed from Winter 2014/2015 with the morning Chubu Centrair departure moving to night time, and Shanghai afternoon departure moving to morning hours. The new outbound leg allows for connections from domestic cities to the Shanghai route, while the return leg provides connection opportunities to their final domestic destinations. Improving China-Japan relations reflected by improving load factors probably played a role in their decision.

Flight Schedule (Oct/26/2014 - Mar/28/2015):
Nagoya/Chubu Centrair – Shanghai/Pudong 1 daily with 737-700.
NH939 NGO 2125 – 2320 PVG 73W Daily
NH940 PVG 0650 – 1000 NGO 73W Daily *From Oct/27.

ANA is by far the biggest operator at Chubu Centrair serving 16 domestic destinations plus Hong Kong (HKG/VHHH) and Shanghai. Tokyo/Haneda (HND/RJTT) will be added from October 26th (ANA releases Winter 2014/2015 schedule.) as their 17th domestic city.

However, Chubu Centrair – Pudong sees heavy competition with China Eastern Airlines (MU/CES) flying in three daily Airbus A320s, China Southern Airlines (CZ/CSN) a daily A320, Air China (CA/CCA) bringing in the A319 daily, and Japan Airlines (JL/JAL) operating daily with Boeing 767s. Chinese LCCs Juneyao Airlines (HO/DKH) and Spring Airlines (9C/CQH) also intend to launch services from Shanghai by 2015 and 2016, respectively, while AirAsia Japan (Mk II) (AirAsia Japan selects Nagoya Chubu Centrair.) is starting by July 2016 and regional Asian routes are on their radar after initial domestic routes have been established.

Reference: All Nippon Airways, September 2nd. (in Japanese)

CoachFlyer: THAI retires the Airbus A300 - Part II.

Continued from CoachFlyer: THAI retires the Airbus A300 - Part I.

On July 31st, Thai Airways International (TG/THA), or simply THAI, officially retired the Airbus A300 from service, ending over 36 years of operations. The final flight was TG045, service from Khon Kaen (KKC/VTUK) to Bangkok/Suvarnabhumi (BKK/VTBS), which was operated by their ultimate aircraft A300B4-622R HS-TAZ Srisubhan.

Airbus A300B4-622R HS-TAZ Srisubhan at Khon Kaen on the last day before her final flight back to Bangkok's Suvarnabhumi as TG045. (Photo: THAI)

THAI's first of the type was A300B4-103 HS-TGH Srimuang, which was delivered on October 25th 1977 and introduced a few weeks later, while the first of the modernized 'A300-600' series was delivered on September 26th, 1985 with A300B4-601 HS-TAA Suwannaphum.

Airbus A300B4-622R HS-TAW Suranaree rotates from Khon Kaen in February 2014. She was decommissioned on May 31st. (Photo: Ryosuke Yano)

The flag carrier acquired a total of 33 A300s (C4-203 x1, B4-103 x7, B4-203 x4, B4-601 x6, B4-605R x2, B4-622R x13) directly from the European manufacturer, forming the backbone of the regional fleet serving trunk intra-Asian routes, and briefly leased two others as well. It covered the Middle East to the west and Japan to the east.

Airbus A300B4-622R HS-TAZ Srisubhan receives the traditional water-cannon salute. (Photo: THAI)

However, since the introduction of the Airbus A330s and Boeing 777s as well as the transferring of more regional routes to Nok Air (DD/NOK) and Thai Smile Airways (WE/THD), their roles have gradually been relegated and by July 2014 the type served just four destinations; Chiang Mai (CNX/VTCC), Hanoi/Noi Bai (HAN/VVNB), Khon Kaen, and Krabi (KBV/VTSG).

Crews of the Airbus A300 disembark HS-TAZ Srisubhan. (Photo: THAI)

The final flight from Hanoi was operated on July 30th as TG565, while the morning of July 31st saw the type leaving Chiang Mai and Krabi for the last time as TG123 and TG242, respectively, leaving the flight to and from Khon Kaen to be the last.

The men who piloted THAI's Airbus A300s. (Photo: THAI)

 
By July, its fleet of A300s had also been reduced to just the ultimate three; HS-TAX Thepsatri, HS-TAY Srisoonthorn, and HS-TAZ Srisubhan. HS-TAT Srimuang flew its last revenue flight on June 30th as TG047 Khon Kaen – Suvarnabhumi and HS-TAW Suranaree on May 31st as TG557 Ho Chi Minh/Tan Son Nhat (SGN/VVTS) – Suvarnabhumi. HS-TAX was retired after TG047 Khon Kaen – Suvarnabhumi on July 19th and HS-TAY on July 30th as TG047 as well.

Airbus A300B4-622R HS-TAT Srimuang also participated in the ceremony. (Photo: THAI)

At Khon Kaen on the last day, enthusiasts took advantage of photo opportunities as the aircraft was parked away from the jet-bridge and boarding took place from the apron, which was done for the last flight. The aircraft departed the northeastern transport hub 30 minutes behind schedule at 1255 and took off from Runway 21. It touched down at Suvarnabhumi's Runway 19L after a flawless flight at 1355.

Farewell messages on the aircraft. (Photo: THAI)

Upon arrival at a remote parking spot, passengers disembarked via the airstairs to be greeted by a flock of THAI A300 pilots who were waiting for the arrival. After all customers had deplaned, staff and all of the A300 team boarded the aircraft for a taxi to the airline's hangar on the east side of the airport for the retirement ceremony.

Door closed for the last A300 HS-TAZ Srisubhan. The moment the AB6 became a legend. (Photo: THAI)

As it moved on its own power, it received a water-cannon salute moments before coming to a stop where two sisters were waiting; HS-TAW Suranaree and HS-TAX Thepsatri. The door was opened and all the A300 crew started disembarking the aircraft, beginning the 'closing door ceremony'. After all had deplaned, the L1 door was closed and a ribbon was placed on it. Everyone at the site signed the airplane.

Farwell THAI Airbus A300. (Photo: THAI)

A farewell ceremony took place in the hangars with THAI employees as well as THAI Fan Club members participating. You will be missed, goodbye THAI AB6: The Legend of the Sky.

Reference: Thai Airways International @ Facebook.