New AirAsia Japan launch slips to 4Q2016 at earliest.

AirAsia Japan (Mk II) [DJ] has officially admitted that they will miss its target launch in Summer 2016 (New AirAsia Japan reveals China, SE Asia, USA ambitions.), and a new date has yet to be set. "Additional time is necessary to ensure the safety of operations," revealed a company spokesperson on May 11th to local media outlets in Nagoya, adding "At this time we are unable to confirm our launch date." This becomes the third delay for the reincarnation of AirAsia's Japanese unit (New AirAsia Japan delays service entry to July 2016.).

Airbus A320-216(SL) JA02DJ/F-WWBO (msn 6972) lands at wet Toulouse after a test flight. It was delivered on April 27th and arrived at Chubu Centrair on May 5th. AirAsia Japan will commence operations with two aircraft. (Photo: Tobias Gudat)

Japan's fifth LCC in five years, AirAsia Japan (Mk II) took delivery of its second Airbus A320 on April 27th, and hiring ground-handling staff at Sapporo/New Chitose [CTS/RJCC] and Sendai [SDJ/RJSS] has been completed. However, the airline reportedly still lacks the adequate number of pilots, maintenance personnel, and operations control staff required by regulator Japan Civil Aviation Bureau (JCAB). Demand for trained aviation professionals is high due to the rapid growth of LCCs and AirAsia Japan (Mk II) may be having difficulty recruiting. It received an Air Operator's Certificate (AOC) in October last year (New AirAsia Japan receives AOC; takeoff in April 2016.), but has yet to pass inspections in maintenance and operations preparedness.

The latest delay pushes back its in-service date to October at earliest, and that is if actual flight training starts by June and JCAB checks including proving flights could be commenced by August. Training flights have yet to begin, and its two aircraft remain grounded at Nagoya/Chubu Centrair [NGO/RJGG] apart from a few sporadic flights to keep them airworthy. The later their launch, the more its competitors would become established in the market. AirAsia Japan (Mk II) had selected Chubu Centrair as there were no LCCs based at the airport serving the nation's third largest metropolitan area at that time (AirAsia Japan selects Nagoya Chubu Centrair.), however, now Jetstar Japan [GK/JJP] (Jetstar Japan starts Nagoya and Kansai to Manila.) and Spring Airlines [9C/CQH] among other LCCs are building up their networks.

Meanwhile, Chubu Centrair has decided to go ahead to build its LCC Terminal, which was planned but shelved when the first AirAsia Japan (Mk I) [JW/WAJ] suspended operations (CoachFlyer JW8541: NRT - FUK on AirAsia Japan's Airbus A320.). They will confirm its design and begin construction in FY2017, with completion slated for summer 2019. Jetstar Japan and Spring Airlines are also considering moving into the new terminal. The airport believes capacity at Tokyo/Haneda [HND/RJTT] and Tokyo/Narita [NRT/RJAA] is not large enough to absorb the increased demand during the 2020 Tokyo Olympics/Paralympics.

Source: Nikkei Shimbun, 2016 April 1st. (in Japanese)
Source: Aviation Wire, 2016 May 6th. (in Japanese)
Source: Travel Vision, 2016 May 12th. (in Japanese)
Source: Traicy, 2016 May 12th. (in Japanese) 

New AirAsia Japan reveals China, SE Asia, USA ambitions.

On February 15th, AirAsia Japan's (Mk II) [DJ] new Chairman Takashi Ide revealed that the delayed LCC is now preparing to start flying in Summer 2016, hopefully in July or August. Speaking at a public symposium calling for a second runway at its Nagoya/Chubu Centrair [NGO/RJGG] hub (AirAsia Japan confirms Spring 2016 launch from Nagoya.), the former Skymark Airlines [BC/SKY] executive who only joined in December (AirAsia Japan CEO to quit, ex-Skymark executives coming.) also disclosed plans for China, hubs at Taipei/Taoyuan [TPE/RCTP] and Tokyo/Narita [NRT/RJAA], plus Airbus A330s for trans-Pacific and Hawaii routes. It will also continue to push for Chubu Centrair's proposed new LCC terminal, which could open as early as FY2018 and handle up to 5 million passengers annually.

Airbus A320-216(SL) JA01DJ, which has not flown since delivery (New AirAsia Japan receives first Airbus A320.), is now being reactivated for a test flight on February 16th. AirAsia Japan (Mk II) plans to commence crew training on its own aircraft on March 15th as their first group of trainees return from Malaysia. Their second aircraft will be deferred to April, while the Mika Ninagawa-designed special livery will be adorned by their third. (Photo: Aviation Wire)

The reincarnation of AirAsia's [AK/AXM] Japanese unit was originally planned to take off in June 2015 (AirAsia Japan is officially reborn; first flight June 2015.), but was postponed to April 2016 after finally receiving an Air Operator's Certificate (AOC) in October (New AirAsia Japan receives AOC; takeoff in April 2016.), only to be delayed again after the surprising management change (New AirAsia Japan delays service entry to July 2016.). Its shareholders have agreed to together inject 3 billion JPY this month. "Former management was essentially trying to build a Japanese branch of AirAsia. But we need to be a Japanese airline in the first place," said Mr. Ide, explaining "An AOC (in Japan) only means the business structure is in place. We cannot fly yet because we have not met all the JCAB criteria to become airworthy." Mr. Ide also added "AirAsia is fun and bright, but that is outside of Japan. People are very conservative here, and it is difficult to carve out a space against ANA and JAL. I learned a lot about that (through Skymark)."

Mr. Ide reiterated that AirAsia Japan's main target would be Japan's inbound market (outbound is shrinking due to aging and a declining population). As already reported, it will start with a fleet of two 180-seat Airbus A320 flying from Chubu Centrair to Sapporo/New Chitose [CTS/RJCC], Sendai [SDJ/RJSS], and Taipei, with each city receiving double-daily frequencies. It plans to carry 150,000 passengers by 2016 year-end. In 2017, its fleet will be increased to six aircraft mostly to fuel China expansion, and Mr. Ide named Beijing/Capital [PEK/ZBAA] or Tianjin [TSN/ZBTJ], Guam [GUM/PGUM], Hong Kong [HKG/VHHH] or Macau [MFM/VMMC], Seoul/Incheon [ICN/RKSI], and Shanghai/Pudong [PVG/ZSPD] or Wuxi [WUX/ZSWX]. Mr. Ide said it will not hesitate to fly to less-congested airports that have attractive incentives for newcomers. First profit is forecasted for FY2017.

For 2018, AirAsia Japan will add three A320s for a total of nine, plus two A330s. The new Airbus wide-body aircraft will be used to open up Chubu Centrair – Singapore/Changi [SIN/WSSS], while the additional A320s will be based at a new hub at Narita and fly to Beijing or Tianjin, Hong Kong or Macau, New Chitose, Taipei, and Shanghai or Wuxi, all destinations which would already be served from Chubu Centrair by then. FY2018 is projected to see total revenue increasing to 25 billion JPY with a profit margin of 7%. During 2019, the fleet will be increased to a dozen A320s and four A330s; the A320s will be based at their third hub at Taipei and start Vietnam and Singapore using fifth freedom rights, while additional A330s will be used to launch Honolulu [HNL/PHNL] from both Chubu Centrair and Narita. FY2019 is expected to see revenue amounting to 35 billion JPY with a profit margin of 10%.

By the end of 2020, the LCC will boast 14 A320s and six A330s. The additional A330s will be used to open up its first trans-Pacific routes to Seattle-Tacoma [SEA/KSEA], though Mr. Ide noted it could be changed to San Francisco [SFO/KSFO] depending on which U.S. partner it interlines with. Meanwhile, the A320 additions will help them connect more dots, including Taipei and Narita with Seoul. By the end of FY2020, AirAsia Japan aims to fly 30 round-trips from Chubu Centair and 10 round-trips from Narita with an average load factor of 75%, producing total revenues of 50 billion JPY and a profit margin of 15%. The LCC also plans to conduct its Initial Public Offering (IPO) during FY2020.

So the details of AirAsia's second shot at Japan have now been unveiled. The importance of China had been repeated, however, as slots at key destinations dry up, it may need to fly to secondary airports. AirAsia has brand recognition in China, but how much impact a split operation among sisters would have is unsure, though it already serves multiple airports for Tokyo with AirAsia X [D7/XAX] at Tokyo/Haneda [HND/RJTT] and Thai AirAsia X [XJ/TAX] at Narita. For Japan – Southeast Asia, Vietnam and Singapore are natural priorities, as the group doesn't have local affiliates there. Meanwhile, Malaysia and Thailand are better served by its lower-cost sisters in these respective countries. It is also noteworthy that AirAsia Japan will become the first group carrier to operate A330s alongside A320s (excluding Indonesia AirAsia X [XT/IDX], for paperwork purposes); the Airbus wide-bodies will mainly serve trans-Pacific and Hawaii markets, with feed not only from Japan (which is shrinking), but from China and Southeast Asia (which is growing).

Source: Traicy, 2016 February 15th. (in Japanese)
Source: Aviation Wire, 2016 February 15th. (in Japanese)
Source: Nikkei Shimbun, 2016 February 15th. (in Japanese)

*Edited/updated on 2016 February 16th.

New AirAsia Japan delays service entry to July 2016.

On February 10th, AirAsia Japan (Mk II) [DJ] officially admitted that it would be unable to meet its target operations launch in April 2016 (New AirAsia Japan receives AOC; takeoff in April 2016.). The company explained it was due to "a number of factors." This becomes the second delay (AirAsia admits Skymark bid defeat, Japan unit delay to 2016.), and they will now work to start flying in July, which would put it more than one year behind their original time schedule (New AirAsia Japan takeoff slipping to Summer 2016?).

Airbus A320-216(SL) JA02DJ/F-WWBO (msn 6972), AirAsia Japan's second aircraft, will be delivered in late February, though its first A320 has yet to fly since delivery last October. A special livery designed by Mika Ninagawa was planned for the second example, but seems to have been postponed to a later airframe. Flight training was originally slated to begin in November last year, but is now planned by March. (Photo: Tobias Gudat)

Japan's fifth LCC had already been set back with a 10-month delay (AirAsia Japan is officially reborn; first flight June 2015.), largely due to shifting strategy to focus more on the international market rather than domestic, difficulties in recruiting pilots and setting up a maintenance scheme, and much-longer-than-anticipated preparation to apply for an Air Operator's Certificate (AOC). It finally obtained one on October 6th, 2015 and announced that it would launch in April with flights from Nagoya/Chubu Centrair [NGO/RJGG] to Sapporo/New Chitose [CTS/RJCC], Sendai [SDJ/RJSS], and Taipei/Taoyuan [TPE/RCTP] (New AirAsia Japan receives AOC; takeoff in April 2016.). However, until now their first Airbus A320 has not flown once since delivery four months ago (New AirAsia Japan receives first Airbus A320.).

Dissatisfied with slow progress, effective December 1st, the LCC group replaced CEO Yoshinori Odagiri, formerly a veteran from All Nippon Airways [NH/ANA] who also headed the first AirAsia Japan (Mk I) [JW/WAJ], with ex-Skymark Airlines' [BC/SKY] Chairman Takashi Ide and President Masakazu Arimori in a surprise move (Skymark relaunched with ANA sponsorship.). Mr. Ide was made AirAsia Japan's Chairman while Mr. Arimori took the place of CFO, while ex-Dell Osamu Hata was promoted to CEO (AirAsia Japan CEO to quit, ex-Skymark executives coming.). However, it must be noted that Skymark and AirAsia Japan are different; the former has been a domestic player centered around its precious slots at Tokyo/Haneda [HND/RJTT], while the latter is based at Chubu Centrair with at least 55% of its capacity to be international.

Nonetheless, the Skymark duo have wide and deep knowledge of the domestic market and expertise in running a low-cost operation in Japan's unique economic and regulatory environment. And, the hidden agenda may be that, they along with management at AirAsia have not given up on eventually merging AirAsia Japan and Skymark, which has so far been politically impossible (Is AirAsia considering a Skymark takeover?) (ANA and AirAsia bid to save Skymark.). Skymark's new President Nobuo Sayama still maintains close relations with the duo, and Skymark's new owners Integral Corporation and ANA Holdings have agreed to re-list the airline by 2020. Meanwhile, the government has hinted liberalizing Haneda to a significant extent sometime, but not long, after the 2020 Tokyo Olympics/Paralympics, and AirAsia and Skymark may be quietly waiting for the appropriate time.

With the latest postponement, some media have voiced concerns over whether AirAsia Japan could really take off. However, though it may be delayed, the Japanese unit of Asia's largest LCC has so much potential it could realize and Tony Fernandes is probably serious about it. Aside from Spring Airlines Japan [IJ/SJO], AirAsia Japan is best placed among Japanese LCCs to tap into China, the single largest (and still growing) source of inbound visitors to Japan, as it already has brand-awareness with AirAsia Group carriers serving 17 Chinese cities. Furthermore, sister carrier AirAsia X [D7/XAX] (and probably Thai AirAsia X [XJ/TAX] as well when Thailand's ICAO red flag is lifted and FAA rating is returned to Category 1) is venturing into the trans-Pacific market (starting with Honolulu [HNL/PHNL]) with a stop in Japan using fifth freedom rights, and if this proves successful, it could grow not only to provide a Japan – North America operation (which is a shrinking market), but a competitive one-stop China – North America (growing market) option.

Source: Nikkei Shimbun, 2016 February 10th (in Japanese) 
Source: Travel Vision, 2016 February 10th. (in Japanese)

New AirAsia Japan takeoff slipping to Summer 2016?

Effective December 1st, AirAsia Japan [DJ] revamped its board by essentially relegating CEO Yoshinori Odagiri to Adviser, a largely ceremonial position, and instead promoting CFO Osamu Hata to CEO and hiring bankrupt Skymark Airlines' [BC/SKY] former Chairman Takashi Ide as Chairman and former President Masakazu Arimori as CFO (AirAsia Japan CEO to quit, ex-Skymark executives coming.). But what made AirAsia Group swap management during such important times when it is preparing to launch operations?

Airbus A320-216(SL) JA01DJ/F-WWBV seen before delivery. It was handed over to AirAsia Japan on October 9th, and arrived at Japan on October 16th. Their second aircraft, to be adorned with a special livery designed by Mika Ninagawa, will be delivered in February. (Photo: Tobias Gudat)

Reportedly, there was unmendable distrust between James Rhee, North Asia CEO for the AirAsia Group, and Mr. Odagiri. Japan's fifth LCC had been set back with a nine-month delay (AirAsia Japan is officially reborn; first flight June 2015.), largely due to shifting strategy to focus more on the international market rather than domestic, difficulties in recruiting pilots and setting up a maintenance scheme, and much-longer-than-anticipated preparation to apply for an Air Operator's Certificate (AOC), which it received on October 6th (New AirAsia Japan receives AOC; takeoff in April 2016.). But without Mr. Odagiri's strenuous yet patience-necessary talks with regulator Japan Civil Aviation Bureau (JCAB), AirAsia Japan could not have obtained it. However, Mr. Rhee could not wait any longer.

On the other hand, Mr. Hata, who previously worked as CEO for Dell Japan, does not have any experience in the airline industry, let alone a unique market like Japan. So talks to headhunt the former Skymark duo reportedly started as early as late September, when they withdrew from Japan's embattled third largest airline after sponsors Integral Corporation and ANA Holdings installed a new board (Skymark relaunched with ANA sponsorship.). Mr. Ide and Mr. Arimori had maintained both official and personal relationships with Mr. Fernandes; the first AirAsia Japan (Mk I) was originally planned to be a joint-venture (JV) with Skymark until ANA stepped in, while AirAsia Group bid to sponsor Skymark (ANA and AirAsia bid to save Skymark.), and at one time Mr. Ide envisioned merging Skymark with the new AirAsia Japan in the long-term. But all of this was politically difficult as Skymark held 36 precious slot-pairs at heavily-regulated Tokyo/Haneda [HND/RJTT] (AirAsia admits Skymark bid defeat, Japan unit delay to 2016.).

Meanwhile, its first aircraft, Airbus A320-216(SL) JA01DJ, which had arrived on October 18th (New AirAsia Japan receives first Airbus A320.), remained dormant at Nagoya/Chubu Centrair [NGO/RJGG], as the airline still did not have a working maintenance team. The aircraft's battery died and its auxiliary power unit (APU) went out of order, and it was not able to have an engine run-up until early December. Training flights were expected by November, but that too has been pushed back to at least January. It is widely believed that its current April 2016 in-service target could be missed by several months. Sources close to the matter also point out that it has already used almost half of its initial 7 billion JPY capital, and cash injections are likely necessary as it takes delivery of its second A320 in February and more employees come on-line.

Can the ex-Skymark duo guide AirAsia Japan? They have wide and deep knowledge of the domestic market and expertise in running a low-cost operation in Japan's unique economic and regulatory environment, however, that said Skymark's success centered around its prized slots at Haneda while AirAsia Japan is based at Chubu Centrair, and Skymark has been a purely domestic carrier while AirAsia Japan plans to allocate at least 55% of its capacity to international. And there is reportedly already looming distrust between employees and the new management, and rumors point out Mr. Hata may be leaving the airline as well.

AirAsia Japan is a stepping stone for the AirAsia Group to expand its network to North America, and also has the potential to bring true (non-ANA/JAL) competition back to Japan. Hopes are still high AirAsia Japan would keep Mr. Fernandes' words, "This is Part 2 of AirAsia Japan's performance, and it will be the last. There won't be a third."

Source: Diamond Online, 2015 December 7th. (in Japanese)
Source: Aviation Wire, 2015 December 16th. (in Japanese)
Source: Aviation Wire, 2015 December 17th. (in Japanese)

AirAsia Japan CEO to quit, ex-Skymark executives coming.

New AirAsia Japan [DJ] has announced that effective December 1st, CEO Yoshinori Odagiri will resign and Chief Financial Officer (CFO) Osamu Hata, formerly with Dell Japan, will be promoted to succeed the role. AirAsia Group has also confirmed that on the same date, ex-Skymark Airlines' [BC/SKY] executives will join the board, including former Chairman Takashi Ide and President Masakazu Arimori, both of whom stepped down from Japan's bankrupt third largest airline (Skymark to file for bankruptcy.) after a new management was installed by ANA Holdings, parent of All Nippon Airways [NH/ANA], and Integral Corporation (Skymark relaunched with ANA sponsorship.).

New AirAsia Japan's CEO Yoshinori Odagiri (center) poses in front of their maiden aircraft Airbus A320-216(SL) JA01DJ at Chubu Centrair after delivery on October 16th. Osamu Hata will be promoted to CEO while ex-Skymark Airlines Takashi Ide will play the representative role of Chairman. (Photo: Aviation Wire)

AirAsia Group started courting the duo not long after Skymark's board was revamped effective September 29th. They had maintained both official and personal relationships with AirAsia Group CEO Tony Fernandes, and at one time Mr. Ide even envisioned handing Skymark control to Asia's largest LCC group in the long term (ANA and AirAsia bid to save Skymark.). Mr. Ide will become Chairman and Mr. Arimori will become CFO, taking the place of Mr. Hata. The duo has wide and deep knowledge of the domestic market and expertise in running a low-cost operation in Japan's unique economic and regulatory environment. That said, Skymark's success centered around its 36 slot-pairs at regulated Tokyo/Haneda [HND/RJTT] while AirAsia Japan is based at Nagoya/Chubu Centrair [NGO/RJGG], and Skymark has been a purely domestic carrier while AirAsia Japan plans to allocate at least 55% of its capacity to international.

Mr. Odagiri, who also served as CEO with the first AirAsia Japan [JW/WAJ] (CoachFlyer JW8541: NRT - FUK on AirAsia Japan's Airbus A320.), will become Adviser. Although no reason has officially been given, the former ANA veteran is likely stepping down due to conflict of ideas within the board on how the new Japanese unit would be run. Having been founded in July 2014, Japan's fifth LCC has been set back with almost a year's delay in launching operations (AirAsia Japan is officially reborn; first flight June 2015.), largely due to shifting strategy to focus more on the international market rather than domestic, difficulties in recruiting pilots and setting up a maintenance scheme, and much-longer-than-anticipated preparation to apply for an Air Operator's Certificate (AOC), which it obtained on October 6th (New AirAsia Japan receives AOC; takeoff in April 2016.).

In terms of voting rights, the new AirAsia Japan is owned by AirAsia Investment 33%, Rakuten 18%, Noevir Holdings 18%, Alpen 18%, and FinTech Global Trading 13%. Having received an AOC, it took delivery of its first Airbus A320 on October 9th (New AirAsia Japan receives first Airbus A320.) and revealed that operations would start in April 2016 from their Chubu Centrair hub to Sapporo/New Chitose [CTS/RJCC], Sendai [SDJ/RJSS] (New AirAsia Japan mulls Nagoya – Sendai.), and Taipei/Taoyuan [TPE/RCTP]. The original AirAsia Japan ceased operating in October 2013 after the Malaysian parent terminated the joint-venture (JV) with partner ANA due to managerial differences. It has since been relaunched as Vanilla Air [JW/VNL] under full ANA control (Vanilla Air launches operations.).

Source: Aviation Wire, 2015 November 27th. (in Japanese)
Source: Nikkei Shimbun, 2015 November 28th. (in Japanese)
Source: Asahi Shimbun, 2015 November 29th. (in Japanese)
Source: Aviation Wire, 2015 November 30th. (in Japanese)

*Edited/updated on November 30th.  

New AirAsia Japan receives first Airbus A320.

On October 16th, AirAsia Japan's (Mk II) [DJ] first aircraft, Airbus A320-216(SL) JA01DJ (MSN 6706), arrived at its hub at Nagoya/Chubu Centrair [NGO/RJGG]. Japan's newest airline had taken delivery of the airplane on October 9th. It departed Toulouse/Balgnac [TLS/LFBO] on October 14th and touched down at the main airport serving Nagoya at 1248 JST on October 16th, after making fuel stops at Cairo [CAI/HECA], Muscat [MCT/OOMS], and Yangon [RGN/VYYY]. As with other AirAsia-branded carriers' A320s, the airframe is configured with 180 seats.

Airbus A320-216(SL) JA01DJ receives a traditional water-cannon salute upon arriving at Nagoya' Chubu Centrair and passing by the prototype Boeing 787 Dreamliner donated to the airport. AirAsia Japan's (Mk II) second aircraft, which is planned for delivery in February 2016, will wear a special livery designed by photographer and film director Mika Ninagawa. (Photo: Aviation Wire)

The reincarnation of AirAsia's Japanese unit received its Air Operator's Certificate (AOC) on October 6th (New AirAsia Japan receives AOC; takeoff in April 2016.) and will launch operations in April 2016 initially serving three cities from Chubu Centrair; Sapporo/New Chitose [CTS/RJCC], Sendai [SDJ/RJSS] (New AirAsia Japan mulls Nagoya – Sendai.), and Taipei/Taoyuan [TPE/RCTP]. All will launch with double-daily frequencies, and details of the schedule will be released in late November when tickets will go on sale. Its fleet will start with two A320s, then quickly build up to six by year-end 2016, and see five additions each year after that to reach 11 by 2018, 16 by 2019, and at least 20 by 2020, when the Tokyo Olympics/Paralympics take place.

"Chubu's 24-hour operation is very attractive as it enables us to add red-eye or early morning flights, thus helping to increase aircraft utilization. The A320 can fly up to 4.5 hours, so all of Japan is covered and Korea, China, Taiwan, Guam, and Saipan are all within reach. Although we aren't in the position to disclose our fourth city, we will actively be adding new destinations in the first five years with a little more emphasis on international than domestic," said CEO Yoshinori Odagiri in a press conference at their RedBase headquarters following delivery, adding "Nagoya is one of Japan's three biggest metropolitan regions along with Tokyo and Osaka, and with Aichi being an industrial area, its population has been increasing. Until now, many have used airports in Tokyo or Osaka to travel beyond, but we would like to create more options from Chubu." The airline is aiming to produce its first full-year profit for FY2018.

Flight attendants of the new AirAsia Japan (Mk II) pose inside brand-new Airbus A320-216(SL) JA01DJ at Chubu Centrair. Crew training flights using the aircraft are expected to start as early as November. (Photo: Aviation Wire)

"We can be flying at least 120 flights in and out of Chubu by 2020," enthused Mr. Odagiri, adding "If we have 20 airplanes and each of them fly six flights (three round-trips) that adds up to 120. If we can have them fly eight legs, the figure would be greater." Aircraft-movement-wise, All Nippon Airways [NH/ANA] is currently the biggest carrier at Chubu Centrair with approximately 90 daily departures and arrivals, and AirAsia Japan's (Mk II) ambition exceeds that. Their next domestic city is expected to be Fukuoka [FUK/RJFF], with all near-term domestic additions to be in Hokkaido, Tohoku (Northeastern Japan), and Kyushu, where it would not need to compete with the super-efficient Shinkansen (Japanese bullet train). For international, coastal cities of China that are already served by AirAsia Group carriers are currently being closely looked at.

Chubu Centrair is planning to restart construction of a LCC terminal, with decision to be made by the end of the year. Mr. Odagiri said "We are currently talking with airport officials about how the terminal should look like including design and features. We hope they will go ahead with it, and we plan on moving there by 2018." The original plan was shelved when the first AirAsia Japan (Mk I) [JW/WAJ] halted operations in 2013, however, demand for a LCC-dedicated facility is increasing, with not only AirAsia Japan (Mk II) but also Chinese LCC Spring Airlines [9C/CQH] building a hub at Chubu Centrair. Other LCCs serving the airport include Cebu Air [5J/CEB] (d.b.a. Cebu Pacific), Hong Kong Express Airways [UO/HKE] (d.b.a. HK Express), Jeju Air [7C/JJA], and Jetstar Japan [GK/JJP], while V Air [ZV/ZAX] is starting in December.

In terms of voting rights, the new AirAsia Japan (Mk II) is owned by AirAsia Investment 33%, Rakuten 18%, Noevir Holdings 18%, Alpen 18%, and FinTech Global Trading 13%. It was founded in July 2014 (AirAsia Japan is officially reborn; first flight June 2015.) after the original AirAsia Japan (Mk I) (CoachFlyer JW8541: NRT - FUK on AirAsia Japan's Airbus A320.) stopped flying in October 2013 when the Malaysian parent terminated the joint-venture (JV) with partner ANA Holdings due to managerial differences. With the latter controlling 66%, everything needed to have consent from ANA, whose true interest was to tame AirAsia to protect the lucrative domestic market. That company now operates as Vanilla Air [JW/VNL] (Vanilla Air launches operations.) under 100% ANA control. This time around, AirAsia Japan (Mk II) will be making decisions on its own.

Source: Aviation Wire, 2015 October 16th. (in Japanese)
Source: Nikkei Shimbun, 2015 October 16th. (in Japanese)
Source: Aviation Wire, 2015 October 16th. (in Japanese)
Source: MyNavi, 2015 October 16th. (in Japanese)
Source: Nikkei Shimbun, 2015 October 17th. (in Japanese)
Source: Yomiuri Shimbun, 2015 October 17th. (in Japanese)

New AirAsia Japan receives AOC; takeoff in April 2016.

On October 6th, AirAsia Japan (Mk II) [DJ] was officially granted an Air Operator's Certificate (AOC) from Japan's Ministry of Land, Infrastructure, Transport, and Tourism (MLIT). It had filed an application on July 21st (AirAsia Japan confirms Spring 2016 launch from Nagoya.). Japan's newest LCC will launch operations in early April 2016 from its Nagoya/Chubu Centrair [NGO/RJGG] hub (AirAsia Japan selects Nagoya Chubu Centrair.) to Sapporo/New Chitose [CTS/RJCC], Sendai [SDJ/RJSS] (New AirAsia Japan mulls Nagoya – Sendai.), and Taipei/Taoyuan [TPE/RCTP] using an initial fleet of two 180-seat Airbus A320s. Its two-letter IATA code will be DJ.

The new AirAsia Japan's (Mk II) first aircraft Airbus A320-216(SL) JA01DJ/F-WWBV at Hamburg/Finkenwerder. It will be delivered shortly and is planned to arrive at Nagoya's Chubu Centrair on October 16th. (Photo: Tobias Gudat)

All three routes will start off with two daily round-trips, and details of their flight schedule will be released in late November, which will coincide with ticket sales start. The Japanese unit of Asia's largest LCC group aims to offer fares at approximately half or third of the price of full-service carriers such as All Nippon Airways [NH/ANA] and Japan Airlines [JL/JAL]. AirAsia Japan's (Mk II) initial expansion will focus on international destinations already served by an AirAsia Group carrier and within a four-hour radius from Chubu Centrair, with domestic routes following afterwards. It sees itself eventually flying 55% international and 45% domestic.

"We're targeting both inbound and domestic visitors. The Chubu (Greater Nagoya) region also has a population of 15 million, so there should be much more demand," said Yoshinori Odagiri, CEO of AirAsia Japan (Mk II), adding "For Sendai, those from abroad want to see Sakura in the spring and snow in the winter, and it's becoming popular among the Japanese too. If we can create demand and increase to four or five flights a day, it may become more appealing to business travelers as well." Sendai will be an all-new city on AirAsia Group's network; New Chitose is served by AirAsia X [D7/XAX] and Taipei/Taoyuan by both AirAsia [AK/AXM] and the AirAsia X.

AirAsia Japan (Mk II) has built Red Base, its headquarters and the base for other AirAsia Group activities in Japan, on the grounds of Nagoya Chubu Centrair. A 180-room low-cost hotel is also being erected at the airport by affiliate Red Planet Japan on behalf of Tune Hotels. (Photo: Aviation Wire)

"We are very excited to be back in Japan. We have fantastic partners here and we are united in the vision to change the way people travel in Japan," commented AirAsia Group CEO Tan Sri Tony Fernandes, going on to say "Centrair is a fantastic base and with our new routes, we look forward not only to enable the Japanese to enjoy our direct destinations but to connect them to the rest of Asia and beyond on our extensive network." The group's Malaysian long-haul arm is looking at resuming service to Chubu Centrair, along with Thai AirAsia X [XJ/TAX] as well, when ICAO's red flag on Thailand is lifted, to feed the Japanese unit's network.

Its first aircraft, A320-216(SL) JA01DJ, will arrive at Chubu Centrair on October 16th, having completed its first flight on July 7th and currently awaiting delivery at Toulouse/Blagnac [TLS/LFBO]. AirAsia Japan's (Mk II) A320s will be supplied from the huge AirAsia Group order pool, and they plan on building its fleet to six by the end of 2016. Five aircraft will be added each year onwards; 11 aircraft by the end of 2017 and 16 by the end of 2018. If demand warrants, they have the option to add two additional A320s by the end of 2018. Its headquarters were officially moved to its brand-new Red Base at Chubu Centrair effective September 29th, and the first batch of crews have already started training in Malaysia. The current workforce of 100 will be increased to around 250 by April 2016.

AirAsia Japan (Mk II) (AirAsia Japan is officially reborn; first flight June 2015.) also completed a shareholding structure reorganization on September 25th. Voting-rights-wise, AirAsia Investment's 33% and Rakuten's 18% ownership haven't changed, while Noevir Holdings' shareholding has been increased from 13.4% to 18% and Alpen from 7.4% to 18%, with FinTech Global Trading, a new investor, now holding 13%. Meanwhile, Octave Japan Infrastructure Fund no longer holds any voting stocks, though it will retain non-voting shares. This is AirAsia Group's second crack into the Japanese market; the original AirAsia Japan (Mk I) [JW/WAJ] (CoachFlyer JW8541: NRT - FUK on AirAsia Japan's Airbus A320.) ended in a divorce with joint-venture (JV) partner ANA Holdings due to managerial differences only 10 months after launching operations. That company now operates as Vanilla Air [JW/VNL] (Vanilla Air launches operations.) under 100% ANA control.

Source: The Star (Malaysia), 2015 October 6th. (in Japanese)
Source: Aviation Wire, 2015 October 6th. (in Japanese)

AirAsia Japan confirms Spring 2016 launch from Nagoya.

On July 21st, AirAsia Japan (Mk II) officially applied for an Air Operator's Certificate (AOC) with the Japan Civil Aviation Bureau (JCAB). Although a change in business strategy along with rigorous document preparations have resulted in an eight-month delay (AirAsia admits Skymark bid defeat, Japan unit delay to 2016.), the regulator is expected to grant permission as early as October. The reincarnation of AirAsia's Japanese unit will launch operations in March or April 2016 with both domestic and international routes from Nagoya/Chubu Centrair [NGO/RJGG] using 180-seat Airbus A320s (AirAsia Japan selects Nagoya Chubu Centrair.).

Seen departing Fukuoka in October 2013, AirAsia Japan's (Mk I) Airbus A320-214 JA02AJ has since been transferred to Indonesia AirAsia as PK-AZI. The first aircraft for AirAsia Japan (Mk II), A320-216(SL) JA01DJ (MSN 6702), has already completed its maiden flight from Toulouse. (Photo: Ryosuke Yano)

Its initial routes are expected to be Fukuoka [FUK/RJFF], Sapporo/New Chitose [CTS/RJCC], and Seoul/Incheon [ICN/RKSI], all former routes of the defunct first AirAsia Japan (Mk I) [JW/WAJ] (CoachFlyer JW8541: NRT - FUK on AirAsia Japan's Airbus A320.). Sendai [SDJ/RJSS] (New AirAsia Japan mulls Nagoya – Sendai.) and Taipei/Taoyuan [TPE/RCTP] will be added shortly after. Japan's latest LCC will establish regional international routes before adding more domestic destinations. Routes will officially be revealed in November, followed shortly by ticket sales start. Sister AirAsia X [D7/XAX], which suspended Kuala Lumpur/Sepang [KUL/WMKK] – Chubu Centrair in February, will also reinstate the link and help feed the Japanese unit.

AirAsia Japan (Mk II) will start with a pair of A320s supplied from the huge AirAsia Group order pool, and plans to build its fleet to six by the end of 2016. Five aircraft will be added each year onwards; 11 aircraft by the end of 2017 and 16 by the end of 2018. If demand warrants, they have the option to add two additional A320s by the end of 2018. All of the planned machines are too much for just the Nagoya market, and AirAsia Japan (Mk II) will continue to push for daytime slots at heavily-regulated Tokyo/Haneda [HND/RJTT]. Their first attempt failed when AirAsia's [AK/AXM] bid for bankrupt Skymark Airlines [BC/SKY] was rejected (ANA and AirAsia bid to save Skymark.). The government is willing to expand Haneda's slots as soon as it reaches accords with business districts and densely-populated areas where aircraft will overfly, hopefully in time for the 2020 Tokyo Olympics/Paralympics.

Nagoya is the third largest metropolitan area in Japan, however, its proximity to the Kansai (Greater Osaka) region and Osaka/Kansai [KIX/RJBB] has left Chubu Centrair underutilized. Along with Kansai, Chubu Centrair is also a 24-hour airport but with ample slots available, and AirAsia Japan (Mk II) is initially staying away from hotly-contested Kansai, which sees Peach Aviation [MM/APJ] and Jetstar Japan [GK/JJP] (Jetstar Japan launches Kansai hub.) established along with a plethora of foreign LCCs competing. However, overlaps will come in due course as all LCCs continue to expand, and some rivalry is inevitable as Jetstar Japan already operates from Chubu Centrair to Fukuoka, Kagoshima [KOJ/RJFK], Kumamoto [KMJ/RJFT], Okinawa/Naha [OKA/ROAH], and New Chitose (Jetstar Japan commences Nagoya – Okinawa.).

Leading AirAsia Japan (Mk II) is CEO Yoshinori Odagiri, who also headed the first version of the Japanese unit. Although originally an ANA veteran, he has since departed Japan's largest carrier to pursue "unfinished business" under the AirAsia brand. (Photo: Aviation Wire)

AirAsia Group CEO Tan Sri Tony Fernandes had said that AirAsia Japan (Mk II) would likely become the biggest contributor to the budget airline group within the next few years as it formed a cornerstone for the network's global aspirations. "With Japan, we don't only need to limit ourselves to Asia. Flights to Vancouver in Canada and Hawaii and the U.S. west coast are now possible. This means we're well on our way towards becoming a global airline," adding "Japan and India are key for us as they can be launching pads for expansion beyond Asia." Keeping up to Mr. Fernandes' ambitions, AirAsia X [D7/XAX] has applied to extend its Kuala Lumpur – Kansai link to Honolulu [HNL/PHNL] for launch as early as November. It would be a litmus test before launching direct flights to the U.S. west coast.

AirAsia Japan (Mk I) was a joint-venture with All Nippon Airways' [NH/ANA] parent ANA Holdings, which was terminated in June 2013 over differences in decision-making. It was subsequently re-branded Vanilla Air [JW/VNL] under full ANA control (Vanilla Air launches operations.). AirAsia's Japanese unit was officially reborn last July under the leadership of CEO Yoshinori Odagiri, who also headed the first incarnation, and CFO Osamu Hata, who previously worked with Dell Japan (AirAsia Japan is officially reborn; first flight June 2015.). Shareholding-wise, Malaysia's AirAsia controls 49%, Octave Japan Infrastructure Fund 19%, Rakuten 18%, Noevir Holdings 9%, and Alpen 5%, though voting-rights-based, AirAsia will hold 33%, the maximum allowed under Japan's current foreign ownership laws, while Octave will have 28.2%, Rakuten 18%, Noevir 13.4%, and Alpen 7.4%.
 
Source: Rakyat Post, 2014 July 16th. (in English)
Source: Toyo Keizai, 2015 July 21st. (in Japanese)
Source: Aviation Wire, 2015 July 21st. (in Japanese) 
Source: Nikkei Shimbun, 2015 July 21st. (in Japanese)

AirAsia admits Skymark bid defeat, Japan unit delay to 2016.

AirAsia Group has likely lost the bid to sponsor bankrupt Skymark Airlines [BC/SKY] (Skymark to file for bankruptcy.), according to Tony Fernandes, group CEO of the Malaysia-based pan-Asian LCC. Several reliable sources confirmed on April 18th that Japan's embattled third largest carrier had selected ANA Holdings, parent of All Nippon Airways [NH/ANA], from over 20 sponsorship proposals (Skymark accedes to ANA investment.). AirAsia [AK/AXM] was the only other airline that had submitted a plan (ANA and AirAsia bid to save Skymark.). 

Airbus A320-216(SL) JA04AJ of AirAsia Japan (Mk I) arrives at Chubu Centrair on delivery on March 29th, 2013. It now flies with AirAsia (Malaysia) as 9M-AQX. The failed original joint-venture (JV) between AirAsia and ANA had also designated Nagoya a hub, but is Kansai also on the cards for the second incarnation? (Photo: Aviation Wire)

"We had a look at it, but I think we lost that... it's complicated, so we don't think our suggestion is going to go through," Mr. Fernandes told during an interview at the World Economic Forum in Jakarta on April 19th. ANA Holdings will control just under 20% in Skymark, effectively putting the carrier's lucrative 36 domestic slot-pairs at heavily-regulated Tokyo/Haneda [HND/RJTT] at the disposal of Japan's largest airline. "It's a protective measure," said Shinya Katanozaka, President of ANA Holdings, which would now dominate 60% of Haneda's domestic slots, including those of similarly part-owned de facto subsidiaries AIRDO [HD/ADO] (d.b.a. Air Do), Skynet Asia Airways [6J/SNJ] (d.b.a. Solaseed Air), and Star Flyer [7G/SFJ]. 

"I don't think that's good for Japan. They're going to end up with two airlines (ANA & JAL), really. And so hopefully AirAsia Japan (Mk II) can inject a little more choice," Mr. Fernandes said, again adding "We were really interested in Skymark, but I don't think it's going to happen." Along with ANA and Japan Airlines [JL/JAL], Japan's governing Liberal Democratic Party (LDP) is opposed to foreign presence in Haneda's domestic market, let alone a LCC with foreign affiliation, making it difficult for overseas carriers to invest in carriers holding slots at the downtown Tokyo airport. And the LDP wanting to portrait then-Democratic Party of Japan (DPJ)-controlled government's massive bailout of JAL from their 2010 bankruptcy a misuse of taxpayer's money put ANA in the only position to assist Skymark. Tokyo/Narita [NRT/RJAA], which opened its LCC terminal earlier this month (Narita opens Tokyo's LCC gateway: Terminal 3.), is also lobbying against letting LCCs into Haneda.

Mr. Fernandes, who was named as one of the 100 most influential persons in the world by TIME magazine, also admitted that AirAsia Japan's (Mk II) (AirAsia Japan is officially reborn; first flight June 2015.) launch would be delayed to early 2016 due to certification by the Japanese regulators taking much longer than expected. "We're going through the application process now, and we're very confident in our model. It has taken longer, because I think there are a few more airlines, and the regulators want to go through all their rules and regulations, but we're on schedule to start early next year," confirmed Mr. Fernandes. Their first aircraft was due this summer (New AirAsia Japan's first Airbus A320 due in July.) with a potential hub at Nagoya/Chubu Centrair [NGO/RJGG] (AirAsia Japan selects Nagoya Chubu Centrair.), though Osaka/Kansai [KIX/RJBB] is also a possibility now that sister AirAsia X [D7/XAX] has applied for a link between Kuala Lumpur/Sepang [KUL/WMKK] and Honolulu [HNL/PHNL] via Kansai.

Source: CNBC, April 20th. (in English)

Skymark hints at new brand: SKY bee?

Bankrupt Skymark Airlines [BC/SKY] (Skymark to file for bankruptcy.) confirmed that it will change its name and livery, and revamp their product along with staff uniforms. The re-branding could take place as early as late July, which is when their corporation rehabilitation plan would be implemented, provided it wins majority approval from creditors (Skymark's total debts skyrocket to 300 billion JPY.) at a meeting to be held in late June. The plan must be submitted to the Tokyo District Court, where it filed for bankruptcy protection, by May 29th.

Boeing 737-82Y(WL) JA737Z arrives at Ishigaki as flight BC567 from Naha on March 28th as Skymark's last flight to the southern Okinawa airport. Along with Miyako, it was dropped as part of their restructuring. (Photo: Aviation Wire)

"We want to think from zero," said Nobuo Sayama, President of Integral Corporation, in a weekend news program, revealing SKY bee is one of their top candidates for the new identity. Together with advertising agencies Sunny Side Up and TYO, the investment fund, which has pledged 9 billion JPY to keep the cash-strapped airline flying while it reorganizes (Skymark to cut 15% of flights, ground all Airbus A330s.), disclosed a logo that uses a hornet. On April 6th, Skymark's President Masakazu Arimori confirmed "We have come a long way, so we want to renew the airline. We can't tell if it will be SKY bee, but SKY will remain part of it."

Meanwhile, the selection of sponsors to help Skymark out of bankruptcy (Skymark seeks investor airline; scraps ANA & JAL dual tie-up.) is taking much longer than expected. "If there is an airline who is sincerely willing to help rebuild Skymark, we would like to work with them," said Mr. Sayama, implying their view of both bidders AirAsia [AK/AXM] and ANA Holdings, parent of All Nippon Airways [NH/ANA] (ANA and AirAsia bid to save Skymark.), as having no genuine interest in Skymark except for the lucrative 36 slot-pairs Japan's third largest carrier controls at Tokyo/Haneda [HND/RJTT]. "If our employees don't feel comfortable about the sponsor, we won't get along," reiterating that Integral is prepared to become its sole sponsor, taking full control of Skymark's rehabilitation.

On March 30th, ANA Holdings' new President Shinya Katanozaka said "We can't let a competitor slip away with the slots," adding "That would be detrimental to our business." So that Skymark wouldn't need to relinquish its precious slots, ANA would keep its investment under 20%, but "Partnering without shareholding is out of question," said Mr. Katanozaka, adding "We need to be at the center of their restructuring." The Ministry of Land, Infrastructure, Transport, and Tourism (MLIT), which regulates Haneda, has notified they would limit any ANA investment to five years, in an effort to keep Skymark as Japan's third force, but ANA's chief opposes "It took over a decade to get rid of AIRDO's [HD/ADO] (d.b.a. Air Do) and Skynet Asia Airways' [6J/SNJ] (d.b.a. Solaseed Air) debts, so in that event we will urge MLIT to lift that."

AirAsia Group's CEO Tony Fernandes is also expected to visit Tokyo soon to pitch his proposal to the embattled airline. According to people close to the matter, the chief of Asia's largest LCC group will present details of a plan to help Skymark settle penalties charged by Airbus and aircraft lessors for the canceled A380s (Skymark's Airbus A380 order in jeopardy.) and A330s (Skymark terminates all Airbus A330 leases.) as well as cooperate on operations, and discuss a potential future investment. "Our plan guarantees Skymark's independence," said the source. Meanwhile, a Skymark spokesperson said "We haven't talked in detail, so at this point we can't say if AirAsia's plan is acceptable or not." Mr. Fernandes is also busy with AirAsia Japan (Mk II), which is currently preparing to launch operations from Nagoya/Chubu Centrair [NGO/RJGG] by the end of this year (New AirAsia Japan eyes launch by year-end 2015.).

However, with Skymark starting to tweak its product, including overhauling its brand, it may actually decide to go without any airline sponsors after all. Check-in baggage allowance has been increased from 15 to 20 kilograms, while stricter cosmetics and hairstyle rules for flight attendants have been implemented, which at least don't seem to go in the direction of a LCC. But opting not to name any airline sponsors is likely to have a negative effect on their negotiation power with creditors in reducing their huge debt (Skymark's total debts skyrocket to 300 billion JPY.). Stay tuned.

Source: Reuters Japan, March 31st. (in Japanese)
Source: Jiji Press, April 1st. (in Japanese)
Source: Mainichi Shimbun, April 4th. (in Japanese)
Source: Aviation Wire, April 6th. (in Japanese) 
Source: Nikkei Shimbun, April 7th. (in Japanese)

*Edited/updated on April 7th, 2015.