Jetstar Japan cuts Nagoya – Kumamoto and Kansai – Oita.

On August 19th, Jetstar Japan [GK/JJP] announced that they would suspend Nagoya/Chubu Centrair [NGO/RJGG] – Kumamoto [KMJ/RJFT] and Osaka/Kansai [KIX/RJBB] – Oita [OIT/RJFO] effective October 25th, the beginning of the Winter 2015/2016 timetable. These routes will only have survived just over a year as they were launched on October 26th (Jetstar Japan starts three routes from Kumamoto.) and July 11th (Jetstar Japan to start Kansai – Oita in October.), 2014, respectively. They also become the first terminations since the Japanese affiliate of the Australia-based LCC launched operations on July 3rd, 2012.

Airbus A320-232(SL) JA06JJ at Chubu Centrair. After Kumamoto is axed, Jetstar Japan will continue to serve Fukuoka, Kagoshima, Okinawa/Naha, and Sapporo/New Chitose from the airport serving Nagoya. While it has denied developing it into a hub for now, AirAsia Japan (Mk II) will launch in Spring 2016 with a base here. (Photo: Jetstar Japan)

"There weren't enough passengers and we didn't see demand growing as much as we had expected," said a spokesperson from the Narita-based LCC, adding "We are currently reviewing our entire network." Kansai – Oita has been served daily, while the Chubu Centrair – Kumamoto link was initially started with double-daily but decreased to once-daily from the Summer 2015 schedule. Meanwhile, they will continue to serve Oita from Narita, and Kumamoto from both Narita and Kansai (Jetstar Japan launches Kansai hub.).

Jetstar Japan surpassed 10 millionth passengers on August 5th, beating rival Peach Aviation [MM/APJ] by one day, making it the fastest LCC to achieve that milestone as it launched operations four months later than the Osaka-headquartered rival. As they start adjusting its domestic network, it will slowly shift focus to the international arena; Hong Kong [HKG/VHHH] from both Narita (Jetstar Japan starts Narita – Hong Kong.) and Kansai (Jetstar Japan goes international with Kansai – Hong Kong.) will go up to double-daily, and a new international destination is expected to be revealed soon.

On the financial side, profitability has yet to come; another 5 billion JPY is reportedly being prepared for injection together by Japan Airlines [JL/JAL] and Qantas Airways [QF/QFA]. The two biggest shareholders pumped in 11 billion JPY in October 2013 and another 7 billion JPY in October 2014 (Jetstar Japan to receive 11 billion JPY from JAL and Qantas.). "2014 was our bottom. Results have improved, and though I can't say when, we expect to be in the black soon," said Masaru Kataoka, Jetstar Japan's Chairman, adding "Now we are looking to expand into high-demand markets in North Asia and Southeast Asia."

Source: Jetstar Japan, 2015 August 5th. (in Japanese) 
Source: Aviation Wire, 2015 August 8th. (in Japanese)
Source: Jetstar Japan, 2015 August 19th. (in Japanese)
Source: Aviation Wire, 2015 August 19th. (in Japanese)

Jetstar Japan to start Nagoya – Okinawa.

On January 21st, Jetstar Japan [GK/JJP] announced that they will inaugurate Nagoya/Chubu Centrair [NGO/RJGG] – Okinawa/Naha [OKA/ROAH] on March 29th, the beginning of the Summer 2015 timetable. The new service will be flown once daily using 180-seat Airbus A320s.

Airbus A320-232(SL) JA20JJ arrives at Narita on delivery from Toulouse on December 19th. Jetstar Japan's 20th aircraft is actually their 23rd, as three others have been sub-leased to other carriers. The 24th will also be leased out, and the fleet will be kept at 20. New routes will be added by increasing utilization. (Photo: Aviation Wire)

One way fares will start from 7,390 JPY, excluding the processing fee and airport taxes. For the peak travel periods of April/May's Golden Week holidays and summer vacation season, fares will start from 7,990 JPY. To promote the route, the Tokyo/Narita [NRT/RJAA]-headquartered LCC is offering 750 seats at just 990 JPY for travel between March 29th through April 28th and May 12th through June 25th. The sale will end at 1000 JST on January 28th.

Flight Schedule:
Chubu Centrair – Naha NEW 1 daily with A320-200. (2015/Mar/29 - Oct/24)
GK381 NGO 1155 – 1415 OKA 32A/320 Daily
GK382 OKA 1505 – 1715 NGO 32A/320 Daily

Naha becomes Jetstar Japan's fifth nonstop destination from Chubu Centrair, after Fukuoka [FUK/RJFF], Kagoshima [KOJ/RJFK], Kumamoto [KMJ/RJFT] (Jetstar Japan starts three routes from Kumamoto.), and Sapporo/New Chitose [CTS/RJCC]. The central Japan airport serving the nation's third largest metropolitan region is expected to become their third hub now that its second hub at Osaka/Kansai [KIX/RJBB] (Jetstar Japan launches Kansai hub.) is up and running.

The Chubu Centrair – Naha route is already served by All Nippon Airways [NH/ANA] three times daily, Japan Airlines [JL/JAL]-affiliate Japan Transocean Air [NU/JTA] four times daily, and Skymark Airlines [BC/SKY] double daily. Skynet Asia Airways [6J/SNJ] (d.b.a. Solaseed Air) will also be entering the market from the Summer 2015 schedule (Solaseed Air to add Ishigaki and Nagoya from Okinawa.), though it would be a de facto transfer of a round-trip from ANA.

Meanwhile, Jetstar Japan started code-sharing with Qantas Airways [QF/QFA] on January 15th, placing its 33.33% owner's code on all nine routes from Narita; Fukuoka, Kagoshima [KOJ/RJFK], Kumamoto, Matsuyama [MYJ/RJOM], Oita [OIT/RJFO], Naha, Kansai, New Chitose, and Takamatsu [TAK/RJOT]. It already code-shares with American Airlines [AA/AAL] and 33.33% owner JAL.

Source: Jetstar Japan, January 15th. (in Japanese)
Source: Jetstar Japan, January 21st. (in Japanese)

Jetstar Japan to receive 11 billion JPY from JAL and Qantas.

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.

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.

Jetstar Japan lost 11.1 billion JPY in its third year.

Jetstar Japan (GK/JJP) posted a staggering 11.1 billion JPY loss for the year ending on June 30th, resulting in three consecutive years in the red. It had lost 8.8 billion JPY last year, from July 1st, 2012 through June 30th, 2013, its second year of operations. Total revenue increased 2.27 times to 29.1 billion JPY, but total costs rose to 36 billion JPY, a whopping 87% increase over the previous year, and operating loss was 6.9 billion JPY.

Airbus A320-232 JA05JJ being pushed back by an automated tower at Narita. (Photo: Ryosuke Yano)

The Tokyo/Narita (NRT/RJAA)-based LCC cited repeated delays in setting up its second hub at Kansai (Jetstar Japan launches Kansai hub.), which was finally launched in June, as the biggest reason. Insufficient number of trained maintenance personnel led them to postpone the launch five times, with as many as five to six of the 18 Airbus A320s sitting idle at Narita, bringing down aircraft utilization. Planned regional international routes also had to be deferred. These coupled with a depreciated JPY and high fuel prices led to increased costs well exceeding increased revenue.

Meanwhile, shareholders' equity decreased by 19.6% from 515 million JPY to 414 million JPY. Voting rights-based, the Japanese unit of the Australian-born brand is controlled 33.3% by Japan Airlines (JL/JAL), 33.3% by Qantas Airways (QF/QFA), 16.7% by Mitsubishi, and 16.7% by Century Tokyo Leasing. After posting a loss one year ago, it received a capital injection of 11 billion JPY together from JAL and Qantas. "Nothing has been decided regarding another capital injection," said a Jetstar Japan spokesperson, who emphasized "We want to make this our last year in the red." JAL has cash, but loss-making Qantas may not be in a position to make further injections. For how long can Jetstar Japan and its shareholders withstand the huge losses?

Although Jetstar Japan continues to bleed red ink, the brand is gradually becoming recognized, tickets can be easily bought at Lawson, one of Japan's ubiquitous convenience store chains, their Kansai hub is up and running, and they are on expansion mode again (Jetstar Japan to launch Kumamoto with three routes.) with first regional international flights also expected in early 2015. Now with all the pieces of its initial business model finally coming together, their fourth year would be a litmus test to prove whether its business plan actually works.

Meanwhile, rival Peach Aviation (MM/APJ), which is only four months older, achieved its first full-year profit in their third year (Peach reports first full-year profit for FY2013.). Yes, the two are different; strategy-wise Peach sees international eventually accounting for 70% of their revenue while Jetstar Japan has much more emphasis on the domestic market, while in terms of hubs, Narita has slot-restrictions plus a curfew which Kansai doesn't, just to give some examples. Nevertheless, Peach's positive results should be putting some pressure.

Reference: Aviation Wire, October 10th. (in Japanese)

*Edited/updated on October 15th, 2014.

Jetstar Japan releases Summer 2014 schedule.

On January 22nd, Jetstar Japan (GK/JJP) announced their Summer 2014 schedule. The Tokyo/Narita (NRT/RJAA)-based LCC will operate up to 38 daily round-trips covering 10 domestic destinations. The number of routes they will operate will stay at 14. Overview is as follows:

Frequency Increases:
Narita - Osaka/Kansai (KIX/RJBB) from 4 to up to 5 daily with 32A/320.
Kansai - Sapporo/New Chitose (CTS/RJCC) from 1 to up to 2 daily with 32A/320.

Frequency Reductions:
Narita - Oita (OIT/RJFO) from 3 to up to 2 daily with 32A/320.
Narita - Okinawa/Naha (OKA/ROAH) from 4 to up to 3 daily with 32A/320.

Jetstar Japan's Airbus A320-232 JA02JJ at Fukuoka. (Photo: Ryosuke Yano)

No new routes nor route cuts have been announced. Meanwhile, there have also been no reports regarding the long-awaited launch of the Kansai hub, which has now been delayed at least twice due to issues in raising its own fresh maintenance crews.

Jetstar Japan reported a whopping 8.8 billion JPY net loss for the year ending in June 2013, and with cash reserves dwindling to only 515 million JPY, its two biggest shareholders Japan Airlines (JL/JAL) and Qantas Airways (QF/QFA) together agreed to a 11 billion JPY injection in October to keep it in the air. Its all-Airbus A320 fleet which was planned to reach 24 by the end of 2014 has now been capped at 18, and the airline says it will not increase that number until its Kansai base is ready. The new Summer 2014 schedule only requires 12 to 14 aircraft depending on the day, which improves on-time performance but hurts aircraft utilization and increases costs.

Can Jetstar Japan survive 2014?

Source: Jestar Japan (in Japanese)