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?
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)
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)
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