Wednesday, March 9, 2016

Skymark loads Haneda red-eye to Okinawa and Sapporo.

On February 19th, Skymark Airlines [BC/SKY] announced that it will operate midnight flights from its Tokyo/Haneda [HND/RJTT] hub to Okinawa/Naha [OKA/ROAH] and Sapporo/New Chitose [CTS/RJCC] between July 1st and October 2nd. The former will operate daily while the latter will fly every day except for Monday. This is the first time a scheduled midnight domestic passenger flight has been loaded from New Chitose since its opening in 1988. All flights will be operated by 177-seat Boeing 737-800s.

Boeing 737-86N(WL) JA73NJ taxies for departure from Haneda. Chairman Nobuo Sayama believes that Skymark would need to go international before the end of the decade as the domestic market continues to shrink. It currently flies 26 737-800s. (Photo: Ryosuke Yano)

The Haneda – New Chitose red-eye round-trip departs Tokyo in the evening, arriving at the Hokkaido capital later in the evening, while the return leg departs New Chitose just past midnight, arriving into Haneda in the early hours. Meanwhile, for the Haneda – Naha red-eye service, both ways will be timed in the early hours of the day and arrive near sunrise at the respective destinations. Fares start from as low as 6,000 JPY, excluding airport service charge.

Flight Schedule:
Haneda – Naha NEW six weekly RED-EYE flight with 737-800.
BC527 HND 0235 – 0520 OKA 73H/738 Tu/We/Th/Fr/Sa/Su *Jul/1 - Oct/2.
BC528 OKA 0305 – 0525 HND 73H/738 Tu/We/Th/Fr/Sa/Su *Jul/1 - Oct/2.
**Skymark will operate up to seven round-trips total per day.

Haneda – New Chitose NEW daily RED-EYE flight with 737-800.
BC731 HND 2130 – 2305 CTS 73H/738 Daily *Jul/1 - Oct/1.
BC732 CTS 0010 – 0200 HND 73H/738 Daily *Jul/2 - Oct/2.
**Skymark will operate nine round-trips total per day.

Last October, local governments and residents near New Chitose agreed to allow up to 30 slot-pairs to arrive and depart between 2200 and 0700 JST in an effort to lure and offer flexibility to cost-conscious airlines. Previously, only six were made available. Until now, the slots have mostly been used by freight carriers or All Nippon Airways' [NH/ANA] passenger aircraft carrying only belly cargo. Koninklijke Luchtvaart Maatschappij [KL/KLM] (d.b.a. KLM Royal Dutch Airlines) was the first to operate scheduled passenger services using the slots, inaugurating Nagoya/Komaki [NKM/RJNA] – New Chitose – Amsterdam/Schiphol [AMS/EHAM] in October 1997. It was suspended in February 2002.

Once post-deregulation's most successful start-up to challenge the ANA/JAL duopoly, the bankrupt airline (Skymark to file for bankruptcy.) is now owned by Integral Corporation, which holds 50.1%, ANA Holdings, with 16.5%, and UDS Airlines Investment, having 33.4% (Skymark relaunched with ANA sponsorship.). UDS is a new investment firm jointly owned by Development Bank of Japan (DBJ) and Sumitomo Mitsui Banking, both loyal partners of ANA.

Code-sharing with ANA, which was planned for Winter 2016/2017, has now been indefinitely postponed, as Skymark continues to refuse to adopt ANA's Able-D reservation system. "ANA told us they would not provide overhaul needed to make two grounded 737s airworthy unless we adopt their system," revealed Nobuo Sayama, Chairman of Skymark and biggest shareholder Integral's President, in an interview, adding "Adopting Able-D would virtually place Skymark under the umbrella of ANA; we would lose our freedom of operation and will not be able to maintain independence. We raised our hands to invest in Skymark because we thought Japan would not have any airline that is run independently." Mr. Sayama has already outsourced overhaul on one of the 737s, and is proposing to place an interface between its system and ANA's to enable code-sharing, which has so far been declined by ANA.

Taking up Able-D would essentially relegate Skymark to a de facto puppet of ANA, joining the likes of AIRDO [HD/ADO] (d.b.a. Air Do), Solaseed Air [6J/SNJ], and Star Flyer [7G/SFJ]. The conflict will continue between Integral and ANA as the former's interest lies in keeping Skymark operationally independent until its planned re-listing in 2020, while the latter wants to keep Skymark under its influence for as long as possible to shut out true competition at bread-and-butter Haneda. With Skymark expected to post a full-year profit for FY2015, ending on March 31st, as performance quickly improves and fuel prices continue to be low, code-sharing with ANA would become less of a priority for Skymark and it would only become more difficult for ANA to tame Skymark.

Source: Hokkaido Prefectural Government. (in Japanese)
Source: Skymark Airlines, 2016 February 19th. (in Japanese)
Source: Hokkaido Shimbun, 2016 February 23rd. (in Japanese)
Source: Bloomberg Japan, 2016 March 3rd. (in Japanese)

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