Saturday, December 20, 2014

Skymark mulls Yonago pull-out and Sendai cuts.

Skymark Airlines [BC/SKY] is reportedly considering pulling out from Yonago [YGJ/RJOH] completely, axing its remaining two routes from the eastern Tottori prefecture airport to Kobe [UKB/RJBE] and Sapporo/New Chitose [CTS/RJCC] at the end of August 2015. Its link between Tokyo/Haneda [HND/RJTT] and Yonago was promised to be resumed (Skymark's fate: MLIT discourages foreign investment.) from the Summer 2015 schedule, but that too would be canceled. In addition, Sendai [SDJ/RJSS] – New Chitose is also likely to be terminated in March 2015.

Boeing 737-86N JA737M was returned to lessor GECAS in October as N854TM. It now plies the skies of neighbor South Korea with Jeju Air as HL8020. (Photo: Ryosuke Yano)

Yonago had long been only served by All Nippon Airways [NH/ANA] until December 20th, 2013, when Skymark launched twice-daily service each to Tokyo/Narita [NRT/RJAA] and Kobe [UKB/RJBE], designating it a focus city, before quickly adding two daily to Haneda, one to New Chitose, and another to Okinawa/Naha [OKA/ROAH] (Skymark announces Yonago and Sendai expansion.) from April 1st, 2014. 177-seat Boeing 737-800s operated all routes.

However, after the rapid depreciation of the JPY, high fuel prices, intensified competition with LCCs, and costs related to the introduction of the Airbus A330 (Skymark Airlines inaugurates Airbus A330 service.) and the now-canceled A380 (Skymark's Airbus A380 order in jeopardy.) pushed Skymark to a whopping 5.7 billion JPY loss during only the first quarter (Skymark posts 5.7 billion JPY loss for 1Q FY2014.), they quickly started winding down Yonago. Haneda, Narita, and New Chitose were all axed at the end of October (Skymark announces Narita closure and Yonago cuts.). The Narita route saw load factors treading around an embarrassing 20-30%, while others did not perform much better showing 40-50%. The Haneda link was recording a modest 50-60%, but with ANA retaliating by slashing fares, yields were low.

Sendai – New Chitose has been Skymark's poorest performer since the October closure of Narita and reductions at Ibaraki [IBR/RJAH] and Yonago, with load factors hovering around 30-40%. The capital city of Miyagi prefecture, which is by far the biggest city in northeastern Japan, is also a focus city for the troubled third largest domestic carrier. Its double-daily flights to Fukuoka [FUK/RJFF] fared better with load factors showing 60-70%, while its single daily to Kobe has not been impressive at around 40-50%. 

Source: Asahi Shimbun, December 19th. (in Japanese)

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