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.
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.
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| 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.
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