Peach commences Okinawa – Hong Kong.

On February 21st, Peach Aviation [MM/APJ] launched four-times-weekly Okinawa/Naha [OKA/ROAH] – Hong Kong [HKG/VHHH] service with 180-seat Airbus A320s, as announced in September last year (Peach announces Okinawa – Hong Kong.). The new link becomes the Osaka/Kansai [KIX/RJBB]-headquartered LCC's seventh international route overall, and its fourth nonstop destination from its second hub at Naha (Peach launches Naha hub; but Naha – Ishigaki axed.).

Peach's Naha staff see off Airbus A320-214 JA803P depart on their inaugural flight to Hong Kong on February 21st. The launch of their long-awaited first route to Southeast Asia from the Ryukyu airport this summer will likely coincide with their 15th A320 delivery in July. (Photo: Aviation Wire)

The last time the route saw a Japanese carrier operating was until March 2003 with Japan Airlines [JL/JAL]; Peach thus becomes the first LCC to fly the route and the first Japanese airline in 12 years.

The inaugural outbound flight MM965 departed Naha at 1522 JST with a load of 127 passengers, including three children. A320-214 JA803P was assigned to the flight. Meanwhile, the first inbound flight MM964 touched down at Naha at 1605 JST with 168 passengers on board. It was operated by A320-214 JA801P. Victor L. L. Chu, Chairman of Hong Kong-based Far Eastern Investment Group, which owns 33.3% of Peach, was also on the inaugural inbound leg.

Flight Schedule (Feb/21 - Mar/28)
Naha – Hong Kong NEW 4 weekly with A320-200.
MM965 OKA 1645 – 1830 HKG 320 Mo
MM965 OKA 1530 – 1715 HKG 320 We
MM965 OKA 1525 – 1710 HKG 320 Sa
MM965 OKA 1305 – 1450 HKG 320 Su
MM964 HKG 1235 – 1550 OKA 320 Mo/We/Sa/Su

Flight Schedule (Mar/29 - Oct/24)
Naha – Hong Kong 3 weekly with A320-200.
MM965 OKA 1340 – 1505 HKG 320 Mo/Fr/Sa
MM964 HKG 1230 – 1600 OKA 320 Mo/Fr/Sa

One-way fares start from 7,180 JPY. Peach has initially decided to serve the route four times a week, but will reduce to three times during the upcoming Summer 2015 timetable. CEO Shinichi Inoue says he wants to fly the route daily, as soon as favorable slot times become available at the bustling airport serving the former British colony. "Inbound demand has been extraordinary, and I'm convinced that Okinawa is already a very attractive destination," Mr. Inoue commented, adding "We wanted to launch the route in time for the Chinese New Year peak travel period."

Meanwhile, Mr. Inoue also confirmed that their first destination in Southeast Asia will be served from Naha this summer, and the city will be revealed in March. "From Naha, we eventually want to fly to Ho Chi Minh City, Hanoi, Bangkok, Kuala Lumpur, and Singapore," said Mr. Inoue. Earlier in February, Airports of Thailand (AoT), which manages the kingdom's six major international airports, disclosed that Peach is discussing Naha – Bangkok/Don Mueang [DMK/VTBD] (Peach mulls Okinawa – Bangkok.). With Thailand now being Japan's sixth biggest inbound market accounting for 4.9% of all foreign visitors, and Japan the most popular outbound market for Thailand, this route is highly likely to become Peach's first link to Southeast Asia.

The Naha hub was launched in July 2014 with ambitions to use it as a scissors hub to funnel passengers between the main islands of Japan and Southeast Asia. From their Okinawa hub, the growing LCC serves Fukuoka [FUK/RJFF], Kansai, Taipei/Taoyuan [TPE/RCTP], and now Hong Kong. Naha – Ishigaki, which was axed in July 2014 owing to heavy competition (Peach launches Naha hub; but Naha – Ishigaki axed.), could be resumed when the airline has "enough resources to fly two or three daily flights," Mr. Inoue said. Miyako [MMY/ROMY] is also on Peach's radar. Meanwhile, a third hub is being set up at Tokyo/Narita [NRT/RJAA] (Peach confirms Narita hub; adds Fukuoka and Sapporo.).

Source: Ryukyu Shimpo, February 21st. (in Japanese)
Source: Aviation Wire, February 21st. (in Japanese)

Skymark to cut 15% of flights, ground all Airbus A330s.

Follow-up from Skymark to file for bankruptcy.

On January 29th, Skymark Airlines [BC/SKY] announced that its filing for bankruptcy protection (Skymark to file for bankruptcy.) with the Tokyo District Court had been accepted. During a press conference held by new President and CEO Masakazu Arimori and Representative Chairman Takashi Ide, it was announced that 15% of flights would be suspended and its entire Airbus A330 fleet grounded effective February 1st. Further network reductions will come into effect from March 29th, the beginning of the Summer 2015 timetable.

Skymark will move back to an all-Boeing 737 operator effective February 1st. The 271-seat all-premium Airbus A330s had only entered service on June 14th, 2014. (Photo: Aviation Wire)

Japan's third largest carrier currently flies 152 daily flights covering 23 nonstop routes, however, that will be reduced to 126 on Wednesdays and 128 on other days effective February 1st. A dozen routes spanning the following cities will be affected: Fukuoka [FUK/RJFF], Ibaraki [IBR/RJAH], Ishigaki [ISG/ROIG], Kobe [UKB/RJBE], Miyako [MMY/ROMY], Nagoya/Chubu Centrair [NGO/RJGG], Okinawa/Naha [OKA/ROAH], Sapporo/New Chitose [CTS/RJCC], Sendai [SDJ/RJSS], and Yonago [YGJ/RJOH].

Flight Reductions effective February 1st:
Fukuoka – Ibaraki from 2 daily to 1 daily. 
Fukuoka – Naha from 4 daily to 2 daily. 
Fukuoka – Sendai from 2 daily to 6 weekly. *Suspension from Mar/29.
Kobe – Naha from 2 daily to 1 daily. 
Kobe – New Chitose from 2 daily to 1 daily. 
Kobe – Yonago from 2 daily to 1 daily.
Chubu Centrair – Naha from 2 daily to 1 daily. 
Chubu Centrair – New Chitose from 2 daily to 1 daily.
Naha – Ishigaki from 3 daily to 2 daily. *Suspension from Mar/29.
Naha – Miyako from 3 daily to 2 daily. *Suspension from Mar/29.
New Chitose – Ibaraki from 2 daily to 1 daily.
New Chitose – Sendai from 3 daily to 2 daily. *Suspension from Mar/29.

From March 29th, in addition to the previously announced suspension of New Chitose – Sendai (Skymark takes ANA & JAL dual tie-up, axes Sendai – Sapporo.), Skymark will also axe Fukuoka – Sendai, plus Ishigaki and Miyako entirely. Further terminations are likely as the airline reorganizes, with Kobe – Kagoshima [KOJ/RJFK], Kobe – Sendai, and Yonago – Naha probably next up; these three along with New Chitose – Sendai recorded load factors in the 30-40% range for December, one of the peak travel months. Yonago, only launched on December 20th, 2013 as a focus city boasting five routes last summer, as well as Sendai are likely to be closed down entirely (Skymark mulls Yonago pull-out and Sendai cuts.).

As for its fleet, the all-premium 271-seat A330-300s (Skymark Airlines inaugurates Airbus A330 service.) they had only introduced in June last year will be grounded effective February 1st. Six have been delivered so far, though the sixth was only recently handed over and was awaiting a ferry flight from France. Five are leased from Intrepid Aviation and one from CIT Aerospace, with four more on order for delivery by September this year, but Skymark will negotiate to return all airframes and cancel the remaining on order. As it dumped capacity on trunk routes, Skymark often had to slash price of the A330s' premium seats to below that of rivals' economy fares; the more Skymark flew the A330, the more they hemorrhaged. Pilots certified for the A330 will be retrained for the Boeing 737.

Total debt stood at 71 billion JPY, not including the 700 million USD in penalties Airbus is seeking for the cancellation of the Airbus A380 order (Skymark hopes to settle Airbus A380 penalty in October.). As it also needs to cancel A330 contracts, the figure is only estimated to grow in the following months.

Investment fund Integral Corporation will provide finance and help Skymark continue flying while it reorganizes, and Mr. Arimori added "No specific airline has shown interest yet, but we will continue to look for sponsors according to law." Prospect for foreign investment is not zero, but ownership change exceeding 20% will necessitate relinquishing Skymark's 36 prized slot-pairs at Tokyo/Haneda [HND/RJTT], which decreases the appetite of airlines abroad (Skymark's fate: MLIT discourages foreign investment.). Domestically, ANA Holdings, parent of All Nippon Airways [NH/ANA], is the only airline in a position to assist, as the controversial 8.10 Paper prohibits Japan Airlines [JL/JAL] from making any new investments until FY2017.

Skymark also said it will continue discussions with both ANA and JAL to reach a code-share deal (Skymark takes ANA & JAL dual tie-up, axes Sendai – Sapporo.), however, the plan is likely to be reviewed as it was aimed to fill the excess capacity of the A330s. Layoff of staff is not planned, and its approximately 2,200 workforce will be retained at least for now.

The quarterly earnings report, which was due today, has been postponed to February 4th. Shares of Japan's troubled third largest carrier plunged 25% today on January 29th, down by 80 JPY, the maximum possible drop in a day, to 237 JPY per share. The carrier will be de-listed from the Tokyo Stock Exchange effective March 1st, so shareholders have until February 27th to manage their stocks.

But again, the biggest question is how will they restructure? Which market will they go after? Skymark will revert to an all-737 operator flying a network that is a fraction the size of ANA and JAL, without any loyalty program nor premium product. Fares will still be more affordable than ANA and JAL, but will be far from matching those of LCCs based at Tokyo/Narita [NRT/RJAA], its access of which has improved greatly both in terms of time and cost. As has been the case with its post-deregulation peers, will it eventually choose to come under the umbrella of ANA (Running out of time: Will Skymark join ANA?)? Or will it become Japan's first airline to be liquidated?

Source: Skymark Airlines, January 29th. (in Japanese)
Source: Skymark Airlines, January 29th. (in Japanese) 
Source: Nikkei Shimbun, January 29th. (in Japanese)
Source: Aviation Wire, January 29th. (in Japanese)
Source: Skymark Airlines, January 29th. (in Japanese) 

*Edited/updated on February 12th.

Skymark commences Sendai – Okinawa.

On August 9th, Skymark Airlines (BC/SKY) launched seasonal service between Sendai (SDJ/RJSS) and Okinawa/Naha (OKA/ROAH). The route will be operated once daily with 177-seat Boeing 737-800s through September 15th.

Boeing 737-82Y(WL) JA73NE taxies past its fellow 737s as it arrives at Haneda. (Photo: Ryosuke Yano)

Flight Schedule (Aug/1 - Sep/15):
Sendai – Naha NEW 1 daily with 737-800.
BC583 SDJ 0910 – 1205 OKA 73H/738 Daily
BC586 OKA 1820 – 2100 SDJ 73H/738 Daily

In other news, Japan's third largest carrier released their July load factors. The figure was 74.4% system-wide, up 2.8% compared to the same period last year; number of available seats rose 6.7% to 920,949, while passengers carried increased 9.7% to 666,834. Their 36 slot-pairs at Tokyo/Haneda (HND/RJTT) continue to post high figures with all above 70%; the six routes from the preferred airport serving the capital generate roughly 80% of their revenue. Sendai is getting there, with numbers exceeding 60%, along with routes from Naha to Ishigaki (ISG/ROIG) and Miyako (MMY/ROMY), both of which posted over 70%.

Meanwhile, load factors from their new focus city at Yonago (YGJ/RJOH) continue to tread around 30-40%, excluding the double-daily Haneda link, while Tokyo/Narita (NRT/RJAA) sees load factors exceeding 70%, however, with heavy competition with LCCs yield is believed to be low (Skymark mulls pull-out from Narita and Yonago.). In the current fare war, the breakeven point for their Narita operations is estimated around 80-85%.

TOKYO/HANEDA
Sapporo/New Chitose (CTS/RJCC) was the highest, recording 90.9%, up 5.2% from the same period last year. The Fukuoka (FUK/RJFF) route saw the figure decrease by 7.2% to 73.1% as a result of capacity increase following the introduction of the Airbus A330 (Skymark Airlines inaugurates Airbus A330 service.). Kagoshima (KOJ/RJFK) was at 74.6%, Kobe (UKB/RJBE) saw 73.4%, Naha 86.1%, and Yonago 73.7%.

TOKYO/NARITA
Skymark competes with LCCs Jetstar Japan (GK/JJP) and Vanilla Air (JW/VNL) on two routes; New Chitose saw 77.2%, up 8.7% over last year, and Naha was at 76.4%, down 1.6%. The Yonago link sees no competitor, but the figure was 30.9%.

YONAGO
All routes except for Haneda are struggling. Naha saw 43.5% while New Chitose was at 42.6% (Skymark expands Yonago, axes Asahikawa and Kumamoto.). Kobe remained low at 37.3%, while the Narita link was even lower, as mentioned above. On August 8th, Governor of Shimane Prefecture Shinji Hirai reported that Shinichi Nishikubo, Skymark's President and CEO, promised that "a complete withdrawal will not happen," though it could also mean all routes except for Haneda are at danger of being axed.

IBARAKI
Kanto's (Greater Tokyo) third airport at Ibaraki (IBR/RJAF) saw its Fukuoka route at 48.2%, and Nagoya/Chubu Centrair (NGO/RJGG) worst in the system at 24.3% (Skymark adds Fukuoka and Nagoya from Ibaraki.). New Chitose was 72.4%, up 6.4%.

SENDAI
Kobe saw 55.7% (Skymark announces Yonago and Sendai expansion.), while Fukuoka saw 64.6% (up 2.1%) and New Chitose saw 64.1% (up 2.2%).

OKINAWA/NAHA
Naha – Ishigaki posted 73.3%, an increase of 17.0% over the same period last year, while Naha – Miyako saw 70.9%, also an increase of 15.2%.

Reference: Aviation Wire, August 11th. (in Japanese)

Skymark's new routes suffering low load factors.

Skymark Airlines' (BC/SKY) system-wide load factor for April, the first month of the Summer 2014 schedule, was 62.1%. Available seats went up 13.4% to 840,397 while total passenger number only increased 6.1% to 521,011. While its lucrative Tokyo/Haneda (HND/RJTT) slots continue to generate positive results, their recent foray into secondary markets is hurting the bottom line. Here's a summary of some of the details.

Boeing 737-86N(WL) JA73NT prepares for another flight from Haneda. (Photo: Ryosuke Yano)

GREATER TOKYO
From Haneda, Fukuoka (FUK/RJFF) was at the top with 84.9% (+0.8% from 1 year ago), while Yonago (YGJ/RJOH) was lowest with 53.1% (new from April 1st). Routes that saw the seventies were Kobe (UKB/RJBE) at 70.9% and Sapporo/New Chitose (CTS/RJCC) at 78.5%. At Tokyo/Narita (NRT/RJAA), Okinawa/Naha (OKA/ROAH) saw 57.0% (-0.9%) and New Chitose was at 46.0% (+17.4%). These routes see heavy competition (Skymark matches fares with LCCs at Narita.) from Jetstar Japan (GK/JJP) and Vanilla Air (JW/VNL). Its new focus city of Ibaraki (IBR/RJAH) saw new services to Fukuoka at 49.9% (new from April 18th) and Nagoya/Chubu Centrair (NGO/RJGG) at 22.8% (Skymark adds Fukuoka and Nagoya from Ibaraki.), while Kobe saw 57.1% (+2.2%).

SENDAI
Sendai's (SDJ/RJSS) new route to Kobe is showing 35.2% (new from April 1st), while Fukuoka was at 49.6% (+6.2%) and New Chitose at 39.4% (-3.3%). The Sapporo service sees competition from Air Do (HD/ADO).

YONAGO
Naha is doing the best at 46.3% (new from April 1st) (Skymark expands Yonago, axes Asahikawa and Kumamoto.), while Kobe showed 29.3%, New Chitose saw 18.7%, and Narita was at 22.2%.

OKINAWAN ISLANDS
Naha – Ishigaki (ISG/ROIG), which was launched on July 10th last year, saw 42.7%. Meanwhile, the Naha – Miyako (MMY/ROMY) route, which resumed on June 1st last year, recorded 57.8%.

As has been their profit structure (and similar for ANA and JAL as well), Haneda's 'bread-and-butter' operations account for over 80% of Skymark's revenue. Japan's third largest domestic carrier has been shifting strategy (Skymark posts loss but optimistic with strategy tweaks.) from a low-cost model to a hybrid model, as a means of survival and to differentiate itself among an increasing portfolio of LCCs. All-premium Airbus A380s and A330s (Skymark Airlines' first two Airbus A330s delivered.) will go after the affordable premium market for international and domestic, respectively, while the focus for domestic expansion is on secondary routes, where Skymark believes LCCs would not be able to produce enough yield.

President and CEO Shinichi Nishikubo reiterates that "Skymark now has (cash) strength to withstand initial losses," adding "we will not pull out in a short time like we used to." Will they be able to make these secondary markets work?

Source: Aviation Wire, May 14th. (in Japanese)

Skymark loads seasonal Sendai - Okinawa service.

On April 23rd, Skymark Airlines (BC/SKY) announced adjustments to their Summer 2014 schedule, including a new seasonal once-daily service between Sendai (SDJ/RJSS) and Okinawa/Naha (OKA/ROAH) to be operated from August 9th through September 15th. Flights to the largest Ryukyu city will also be increased from Tokyo/Haneda (HND/RJTT) and Nagoya/Chubu Centrair (NGO/RJGG) during this period.

Boeing 737-86N(WL) JA73NT moments before rotation at Haneda. (Photo: Ryosuke Yano)

New routes:
Sendai – Naha NEW 1 daily with 73H/738.
BC583 SDJ 0910 – 1205 OKA 73H/738 Daily *Aug/9 – Sep/15.
BC586 OKA 1820 – 2100 SDJ 73H/738 Daily *Aug/9 – Sep/15.

Frequency increases:
Chubu Centrair – Naha from 2 to up to 4. *Aug/9 – Sep/15. (3 during Jul/18 – Aug/30)
Naha – Miyako (MMY/ROMY) from 2 to 3. *Aug/9 – Sep/15.
Haneda – Naha from 6 to up to 7. *Aug/9 – Sep/15.

In addition, Skymark will also offer a second daily through-fare between Ibaraki (IBR/RJAH) and Naha via Kobe (UKB/RJBE). All of these services will be operated by 177-seat Boeing 737-800s. Abundant with coral reefs and beautiful beaches, Okinawa is a favorite summer vacation destination for the Japanese.

While their 36 prized slots at heavily-regulated Haneda generate roughly 80% of their revenue, Japan's third largest carrier continues to expand at its mini-hub at Kobe and focus cities of Ibaraki (Skymark adds Fukuoka and Nagoya from Ibaraki.), Sendai, and Yonago (YGJ/RJOH) (Skymark expands Yonago, axes Asahikawa and Kumamoto.).

Source: Skymark Airlines, April 23rd. (PDF; in Japanese)

FDA plans charters to Aomori, Hokkaido, and Okinawa.

Fuji Dream Airlines (JH/FDA) is planning various charter flights to Aomori, Hokkaido, and Okinawa from its hubs at Nagoya/Komaki (NKM/RJNA) and Shizuoka (FSZ/RJNS) this upcoming summer.

Embraer ERJ170-100STD (E170) JA01FJ 'Dream Red' arriving at Fukuoka. (Photo: Ryosuke Yano)

FDA will fly a round-trip flight between Shizuoka and Aomori (AOJ/RJSA) on April 26th, 28th, and May 2nd as part of Hankyu Travel International's package tour to see Hirosaki's Sakura (cherry blossom) Festival in Aomori during 'Golden Week'. The airline already operates two daily scheduled round-trips between Komaki and Aomori, which will be increased to three from July 1st (Fuji Dream Airlines' Summer 2014 changes.).

To Okinawa prefecture in southern Japan, Fuji Dream will fly to Miyako (MMY/ROMY) from Komaki on April 27th on behalf of Japan's largest travel agency JTB, and from Shizuoka on May 1st, 3rd, and 6th on behalf of tour firm Tabix.

From June 28th to September 20th, FDA will fly a weekly single round-trip between Komaki and Sapporo/Okadama (OKD/RJCO), the downtown airport of the Hokkaido capital, on Saturdays using Embraer ERJ170-100s (E170). Plans are also underway to operate up to 98 charter flights to and from Wakkanai (WKJ/RJCW) at the northernmost tip of Hokkaido from Komaki, Matsumoto (MMJ/RJAF), Niigata (KIJ/RJSN), and Shizuoka between June 13th and August 18th. 

FDA currently operates five ERJ170-200s (E175) and three ERJ170-100s (E170), and its eighth aircraft was only delivered (Fuji Dream Airlines receives eighth E-Jet 'Tea Green'.) roughly two weeks ago. The company's mission has been 'bridging communities to promote exchanges in people, products, economy, and culture'. 

Source: Hokkaido Shimbun, March 12th. (in Japanese)
Source: Miyako Mainichi Shimbun, March 13th. (in Japanese)
Source: FlyTeam, March 18th. (in Japanese)

Ryukyu Air Commuter to fly island-hopping charters.

Starting today, Ryukyu Air Commuter (RAC) will be operating island-hopping charters in the Ryukyu Islands of Okinawa prefecture, in the southernmost region of Japan. A De Havilland Canada DHC-8-100Q will operate a Okinawa/Naha (OKA/ROAH) - Kumejima (UEO/ROKJ) - Miyako (MMY/ROMY) - Ishigaki (ISG/ROIG) - Naha rotation in four days. RAC will operate 10 rotations between March 11th and 23rd.

De Havilland Canada DHC-8-103Q JA8973 taxies at Naha. (Photo: Ryosuke Yano)

Flight schedule:
RAC3801 OKA 1215 - 1250 UEO DH1 March 11 - 20
RAC3803 UEO 1335 - 1425 MMY DH1 March 12 - 21
RAC3805 MMY 1450 - 1545 ISG DH1 March 13 - 22
RAC3808 ISG 1630 - 1735 OKA DH1 March 14 - 23

Now operated for seven consecutive years, these flights are part of a packaged tour arranged and sold by Tokyo-based travel agency Club Tourism International to visit the Kumejima, Miyako, and Yaeyama islands. About 300 participants will come from Tokyo, Nagoya, and Osaka. Flight RAC3805 is expected to provide a sightseeing opportunity of the Yaeyama Islands before landing at Ishigaki.

RAC is a commuter airline connecting the Ryukyu Islands operating a fleet of one DHC-8-300Q and four DHC-8-100Qs. It is owned 72.9% by JAL Group's Okinawan arm Japan Transocean Air (NU/JTA), 5.1% by the Government of Okinawa, and the rest by local businesses.

Source: Japan Transocean Air, March 7th. (PDF; in Japanese)
Source: Aviation Wire, March 10th. (in Japanese)

Japan Transocean Air introduces 'Sakura Jimbei'.

As planned, Okinawa/Naha (OKA/ROAH)-based Japan Transocean Air (NU/JTA) today introduced the second Jimbei Jet, nicknamed 'Sakura Jimbei', the second special livery in collaboration with Okinawa's famous Churaumi Aquarium, on one of their 13 Boeing 737-400s. Jimbei translates to whale shark, or Rhincodon typus. The first revenue flight with these colors was NU565, service from Naha to Miyako (MMY/ROMY).

Sakura Jimbei. (Image: JTA)

B737-446 JA8992, which began its career with Japan Airlines in 1994 and migrated to JTA after serving JAL Express (JC/JEX) from 1998 to 2011, was chosen for the livery. The aircraft was painted in Taiwan and delivered to Naha on January 3rd.

JA8992's belly design. (Image: JTA)

Along with the first Jimbei Jet, B737-4Q3 JA8939, which is painted blue and was introduced in December 2012, the pink whale shark will swim around Japanese skies until December 2017. It is expected that JTA will release the next day's schedule of Sakura Jimbei on their website, as has been the case with the original Jimbei Jet and the SWAL Retrojet (B737-446 JA8999).

JTA and Churaumi Aquarium's official logo for the Jimbei Jets. (Image: JTA)

Look carefully... she has two baby whale sharks on her belly!