Fuji Dream Airlines' tenth Embraer E-Jet is Silver.

On March 5th, Fuji Dream Airlines [JH/FDA] took delivery of Embraer ERJ170-200/STD (E175) JA10FJ, their 10th aircraft. Painted and named Silver, it features the Brazilian manufacturer's Fuel Burn Improvement Package 2, as on their ninth airframe Gold (Fuji Dream's ninth Embraer E-Jet is Gold.). It boasts new wingtips and several other minor aerodynamic changes such as wheel caps and auxiliary power unit (APU) air inlet improvements, resulting in a 5.5% reduction in fuel burn. Other changes include new LED navigation lights.

Embraer ERJ170-200/STD (E175) JA10FJ Silver is greeted by Fuji Dream employees upon arrival at Nagoya's Komaki Airport on March 9th. (Photo: Fuji Dream Airlines)

The 84-seat aircraft departed São José dos Campos [SJK/SBSJ] on the same day and touched down at the airline's Nagoya/Komaki [NKM/RJNA] hub four days later on March 9th at 1552 JST, flying a similar route as their eighth (Fuji Dream Airlines receives eighth E-Jet 'Tea Green'.) and ninth airframes. On the way, it made stops at Natal [NAT/SBNT], Sal [SID/GVAC], Almeria [LEI/LEAM], Larnaca [LCA/LCLK], Dubai/Al Maktoum [DWC/OMDW], Kolkata/Netaji Subhas Chandra Bose [CCU/VECC], Can Tho [VCA/VVCT], and Kaohsiung [KHH/RCKH]. Total flight time was 32 hours and 40 minutes, traveling over 21,700 kilomters (13,500 miles).

The inaugural revenue flight for Silver took place on March 11th as JH355 from Komaki to Hanamaki [HNA/RJSI]. It flew the return leg to Komaki as JH356 and was then assigned to Kitakyushu [KKJ/RJFR] and back on flights JH407/408. While their ninth airframe was used to open up new markets to Izumo [IZO/RJOC] and Kitakyushu in March 2015 (Fuji Dream launches Izumo and Kitakyushu.), their 10th will be used to increase frequency in existing markets, with up to 34 daily round-trips scheduled, an increase from 29 for Summer 2015. It will also be utilized to increase its growing charter business, which accounted for 1,050 of Fuji Dream's flights in FY2015.

Summer 2016 Schedule Changes (effective Mar/27):
Komaki –  Aomori increase from 2 to 3 daily.
Komaki – Hanamaki increase from 3 to 4 daily.
Komaki – Izumo increase from 1 to 2 daily. (from Jul/1)
Komaki – Kochi increase from 1 to 2 daily.
Komaki – Yamagata increase from 1 to 2 daily.
Shizuoka – Kagoshima daily maintained. (3 weekly in Summer 2015)
Shizuoka – New Chitose NEW 5 weekly. (resumption)

Meanwhile, the Shizuoka-based regional carrier will be receiving its 11th E-Jet in June. Details regarding what roles it would play have not been officially released, however, President Yohei Suzuki has spoken of launching a base Nagoya/Chubu Centrair [NGO/RJGG], the newer and premier international airport serving the Chubu (Greater Nagoya) region, to launch midnight international charters to China, South Korea, and Taiwan, as well as start Chubu Centrair – Tokyo/Narita [NRT/RJAA] (Fuji Dream mulls Chubu – Narita and international charters.). The latter service would code-share with and feed overseas carriers flying into Narita, and Mr. Suzuki had admitted that discussions with multiple airlines are already taking place.

Source: Fuji Dream Airlines, 2016 January 20th. (in Japanese)
Source: Fuji Dream Airlines @ Facebook. (in Japanese)
Source: Aviation Wire, 2016 March 9th. (in Japanese)

Jetstar Japan launches Narita – Manila.

On March 15th, Jetstar Japan [GK/JJP] added Manila/Ninoy Aquino [MNL/RPLL] with initial service from its Tokyo/Narita [NRT/RJAA] hub (Jetstar Japan reveals Manila, downsizes Kumamoto.), making the Filipino capital their third international destination after Hong Kong [HKG/VHHH] (Jetstar Japan goes international with Kansai – Hong Kong.) and Taipei/Taoyuan [TPE/RCTP] (Jetstar Japan launches Taipei, next up Manila.). All flights are operated by 180-seat Airbus A320-200s. They became the first Japanese budget carrier to serve the Philippines.

Airbus A320-232(SL) JA15JJ departs for Jetstar Japan's maiden flight to the Philippines. Its fleet has been capped at 20 since December 2014 and growth has been achieved by increasing aircraft utilization, which is expected to approach maximum when frequency on the three new routes to Manila are increased. (Photo: Aviation Wire)

The inaugural outbound flight GK041 was operated by A320-232(SL) JA15JJ, which departed Narita at 2039 JST, 34 minutes behind schedule. It arrived at Manila past midnight at 0012 PHT, just seven minutes behind published time. The three-times-weekly service will be up-gauged to up to daily from April 29th. "Filipinos account for the third largest expatriate population in Japan. There's a huge opportunity there," said CEO Gerry Turner, revealing booking rates for March are exceeding 90%.

Flight Schedule:
Narita – Manila/Ninoy Aquino NEW up to daily with A320-200.
GK041 NRT 2005 – 0005(+1) MNL 32A/320 Tu/Th/Sa *Mar/15-19.
GK041 NRT 2005 – 0005(+1) MNL 32A/320 Mo/Tu/We/Th/Sa *Mar/20-26.
GK041 NRT 2010 – 0010(+1) MNL 32A/320 Fr *Mar/20-26.
GK041 NRT 2030 – 0005(+1) MNL 32A/320 Tu/Th/Fr/Sa/Su *Mar/27-Apr/3.
GK041 NRT 2030 – 0005(+1) MNL 32A/320 Tu/We/Th/Fr/Sa/Su *Apr/4-28.
GK041 NRT 2030 – 0005(+1) MNL 32A/320 Daily *Apr/29-May/8, Jun/1-30.
GK041 NRT 2030 – 0005(+1) MNL 32A/320 Tu/Th/Fr/Sa/Su *May/9-31.
GK040 MNL 0105 – 0615 NRT 32A/320 We/Fr/Su *Mar/16-20.
GK040 MNL 0105 – 0615 NRT 32A/320 Tu/We/Th/Fr/Sa/Su *Mar/21-27.
GK040 MNL 0105 – 0635 NRT 32A/320 Mo *Mar/28.
GK040 MNL 0105 – 0635 NRT 32A/320 We/Fr *Mar/29-Apr/4.
GK040 MNL 0105 – 0635 NRT 32A/320 We/Th *Apr/5-29.
GK040 MNL 0105 – 0635 NRT 32A/320 We *May/10-Jun/10.
GK040 MNL 0035 – 0605 NRT 32A/320 Mo/Sa/Su *Mar/29-Apr/4.
GK040 MNL 0035 – 0605 NRT 32A/320 Mo/Tu/Sa/Su *Apr/5-29.
GK040 MNL 0035 – 0605 NRT 32A/320 Daily *Apr/30-May/9.
GK040 MNL 0035 – 0605 NRT 32A/320 Mo/Tu/Sa/Su *May/10-Jun/1.
GK040 MNL 0035 – 0605 NRT 32A/320 Daily *Jun/2-Jul/1.

All flights are timed to leave Japan in the evening, arriving in the Philippines past midnight, and make a red-eye departure for an early-morning return back to Japan. This helps to increase aircraft utilization, as Narita has a curfew between 2300 and 0600 JST and most other domestic airports are also closed during midnight hours. Narita – Manila is currently served by All Nippon Airways [NH/ANA] daily, Cebu Air [5J/CEB] (d.b.a. Cebu Pacific Air) daily, Japan Airlines [JL/JAL] twice daily, Delta Air Lines [DL/DAL] daily, and Philippine Airlines [PR/PAL] twice daily.

Jetstar Japan will also link Manila with Nagoya/Chubu Centrair [NGO/RJGG] starting on April 1st and Osaka/Kansai [KIX/RJBB] on April 7th. Last October, Jetstar Airways [JQ/JST], Jetstar Asia Airways [3K/JSA], and Jetstar Japan had received antitrust immunity to coordinate flight times and prices on international routes to and from Japan to Taiwan and the Philippines. The Singapore/Changi [SIN/WSSS]-based sister's existing Kansai – Taipei and Kansai – Manila services are included in the scheme.

According to Qantas Airways' [QF/QFA] earnings report released on February 23rd, Jetstar Japan's EBIT for the second half of 2015 was in the black, making it the first time the Narita-based LCC recorded a profit since starting operations in July 2012. Their system-wide load factor for the same period also increased to 84% compared to 75% one year ago. Mr. Turner attributes the turnaround to its second hub at curfew-free Kansai (Jetstar Japan launches Kansai hub.), new international flights, and lower fuel costs. For FY2014 ending in June 2015, it had posted a 7.9 billion JPY loss and its two major shareholders Japan Airlines [JL/JAL] and Qantas together injected 7 billion JPY in November 2014 and another 4 billion JPY in June 2015.

Source: Asahi Shimbun, 2016 February 25th. (in Japanese)
Source: Asahi Shimbun, 2016 February 25th. (in Japanese)
Source: Aviation Wire, 2016 February 25th. (in Japanese)
Source: Aviation Wire, 2016 March 16th. (in Japanese)

Vanilla Air announces Kansai – Taipei.

On March 14th, Vanilla Air [JW/VNL] revealed that it will launch Osaka/Kansai [KIX/RJBB] – Taipei/Taoyuan [TPE/RCTP] on April 27th, making it just in time for Japan's Golden Week peak travel period (Vanilla Air to add Kansai – Taipei in Summer 2016.). The new service will be operated daily using 180-seat Airbus A320-200s. Kansai becomes the fledgling LCCs fourth destination in Japan, but the first not linking with Tokyo/Narita [NRT/RJAA], where it is based and all flights currently depart from.

Airbus A320-216(SL) JA01VA rotates from Amami bound for Narita. Vanilla Air will take delivery of their ninth A320 in April followed by the 10th in autumn. It plans to add up to five during FY2016 and build its fleet to 25 by FY2020. (Photo: Aviation Wire)

The aircraft for Taipei – Kansai arrives into Taiwan's largest city as the last flight of the day from Narita just past midnight, and turns around for the red-eye inbound flight to Kansai. After a brief 60-minute stay, it departs for Taipei as the outbound flight from Kansai, in time for the first flight of the day from Taipei back to Narita. Tickets went on sale on March 15th at 1400 JST with one-way fares starting from 6,490 JPY.

Flight Schedule:
Kansai – Taipei/Taoyuan NEW daily with A320-200.
JW178 TPE 2150 – 0135(+1) KIX 32A/320 Daily *Apr/27 - Sep/13.
JW178 TPE 2235 – 0220(+1) KIX 32A/320 Daily *Sep/13 - Oct/29.
JW179 KIX 0235 – 0430 TPE 32A/320 Daily *Apr/28 - Sep/14.
JW179 KIX 0315 – 0510 TPE 32A/320 Daily *Sep/14 - Oct/30.

This schedule is similar to how part-sister Peach Aviation [MM/APJ] flies into Tokyo/Haneda [HND/RJTT] from Seoul/Incheon [ICN/RKSI] (Peach Aviation starts Haneda – Seoul.) and Taipei (Peach Aviation inaugurates Haneda – Taipei.). However, it is ironic that Peach does it to access Haneda, where only midnight international slots are available, while Vanilla will do it to get around the curfew it endures at Narita and increase aircraft utilization.

Vanilla is expected to report its first full-year profit of an estimated 1.5 billion JPY for FY2015 ending on March 31st. In January, parent ANA Holdings had publicly announced that it would have its wholly-owned LCC arm build hubs at Okinawa/Naha [OKA/ROAH] and Taipei (Vanilla Air eyes China, Southeast Asia, and Okinawa hub.). Vanilla has already opened a reservations center in Taipei, and hopes to add flights to Philippines, Singapore, Thailand, and Vietnam by 2020 using fifth freedom rights, effectively making the Taiwanese capital a transfer hub with strong local demand as well.

Japan – Taiwan is a booming market with a plethora of LCCs alongside full-service airlines operating, but also now highly-competitive, with Kansai – Taipei soon to become the route with the most carriers in the world with a dozen airlines. Current LCCs include Jetstar Asia Airways [3K/JSA], Jetstar Japan [GK/JJP] (Jetstar Japan adds Nagoya and Kansai to Taipei.), homegrown Peach, Tigerair Taiwan [IT/TTW], and V Air [ZV/VAX], while legacy carriers include Cathay Pacific Airways [CX/CPA], China Airlines [CI/CAL], EVA Air [BR/EVA], Japan Airlines [JL/JAL], and TransAsia Airways [GE/TNA], with Philippine Airlines [PR/PAL] posed to enter from June 25th.

Source: Nikkei Business, 2016 March 10th. (in Japanese)
Source: Vanilla Air, 2016 March 14th. (in Japanese)

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)

Peach Aviation commences Okinawa – Narita.

On February 20th, Peach Aviation [MM/APJ] launched Okinawa/Naha [OKA/ROAH] – Tokyo/Narita [NRT/RJAA] (Peach Aviation grows Okinawa; Narita and more Taipei.). It initially started out with an evening round-trip flying three times weekly, operating on Mondays, Thursdays, and Saturdays, due to limited availability of favorable slot times at Narita, but will be up-gauged to daytime hours and go daily from March 27th, the beginning of the Summer 2016 schedule. 180-seat Airbus A320s are assigned.

Airbus A320-214 JA803P departs Peach's second hub at Naha. It plans a modest fleet of 20 by October 2017 with a third hub at Narita and a fourth in Sendai. (Photo: Aviation Wire)

Inaugural flight MM508 departed Naha at 1617 JST, 17 minutes behind schedule, with a load of 168 passengers (including one infant), four flight attendants, and two pilots, and arrived at Narita at 1815, 10 minutes before the published time. A320-214 JA803P operated both legs.

Flight Schedule:
MM504 OKA 1100 – 1340 NRT 320 Daily *From Mar/27.
MM508 OKA 1600 – 1825 NRT 320 Mo/Th/Sa *Feb/20 - Mar/26.
MM505 NRT 1425 – 1715 OKA 320 Daily *From Mar/27.
MM509 NRT 1900 – 2215 OKA 320 Mo/Th/Sa *Feb/20 - Mar/26.

The Ryukyu capital became the growing LCC's fourth destination from Narita, after Fukuoka [FUK/RJFF], Osaka/Kansai [KIX/RJBB], and Sapporo/New Chitose [CTS/RJCC] (Peach starts Narita to Fukuoka and Sapporo.), and the sixth overall from the Tokyo region, as it serves Seoul/Incheon [ICN/RKSI] (Peach Aviation starts Haneda – Seoul.) and Taipei/Taoyuan [TPE/RCTP] (Peach Aviation inaugurates Haneda – Taipei.) from Tokyo/Haneda [HND/RJTT] using midnight slots. Meanwhile, Narita is the sixth city from their Naha hub, which already sees service to Fukuoka, Hong Kong [HKG/VHHH], Kansai, Seoul (Peach Aviation starts Okinawa – Seoul.), and Taipei.

The Naha – Narita route currently has three other airlines operating; All Nippon Airways [NH/ANA], subsidiary of Peach's 38.67% shareholder ANA Holdings, mainly feeds its international flights, while Jetstar Japan [GK/JJP] and Vanilla Air [JW/VNL], ANA's wholly-owned LCC arm, compete with Peach. Japan Airlines [JL/JAL] withdrew from the route in October 2014 and instead code-shares with 33% subsidiary Jetstar Japan to feed its international flights (JAL to terminate Narita – Okinawa.).

One year ago, Peach had publicly stated that Narita would become its third hub after Kansai and Naha (Peach confirms Narita hub; adds Fukuoka and Sapporo.), however, CEO Shinichi Inoue has admitted that it could be delayed due to the unavailability of favorable slot times, and hubbing Sendai [SDJ/RJSS] may end up coming before (Peach plans Sendai hub by Summer 2017.). Meanwhile, Mr. Inoue is eager to add more midnight international flights from Haneda, with Hong Kong being the most likely candidate. Peach does not have any access to daytime slots, hence a split operation for Tokyo.

Source: Aviation Wire, 2016 February 20th. (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.

Spring Airlines Japan launches Wuhan and Chongqing.

On February 13th, Spring Airlines Japan [IJ/SJO] launched its first international service from Tokyo/Narita [NRT/RJAA] to Wuhan [WUH/ZHHH], followed by Chongqing [CKG/ZUCK] the following day on February 14th. Thus, the affiliate of Spring Airlines [9C/CQH] became the first Japanese LCC to serve mainland China. Regulator Japan Civil Aviation Bureau (JCAB) had granted the fledgling airline approval to operate international routes on December 16th (Spring Airlines Japan granted approval to go international.). All flights are operated by 189-seat Boeing 737-800s.

Boeing 737-86N(WL) JA03GR rotates from Narita for her maiden flight to Wuhan. Spring Airlines Japan has so far capped its fleet at just three aircraft. (Photo: Aviation Wire)

Maiden international flight IJ1011 departed Narita at 1024 JST, four minutes behind schedule, with a load of 138 passengers including 11 infants. 737-86N(WL) JA03GR was assigned. Wuhan started with a three-times-weekly frequency, operating on Mondays, Wednesdays, and Saturdays, while Chongqing runs four times a week on Tuesdays, Thursdays, Fridays, and Sundays. Both round-trips are timed to depart Narita in the morning for an afternoon arrival into the Chinese cities and an evening return to Japan.

Flight Schedule:
Narita – Wuhan NEW 3 weekly with B737-800.
IJ1011 NRT 1020 – 1415 WUH 73H Mo/We/Sa
IJ1012 WUH 1515 – 1940 NRT 73H Mo/We/Sa

Narita – Chongqing NEW 4 weekly with B737-800.
IJ1021 NRT 0900 – 1415 CKG 73H Tu/Th/Fr/Su
IJ1022 CKG 1515 – 2025 NRT 73H Tu/Th/Fr/Su

"As a group, we are looking forward to bringing more Chinese tourists to Japan, and hopefully more Japanese to China as well," said Wang Zhenghua, Chairman of Spring Airlines Group, while the Japanese affiliate's President Hiroshi Ukai enthused "This is our first step to build our international network. We will be adding many more destinations from Narita to China." Lanzhou [LHW/ZLLL] has been mentioned as the possible next city, while Osaka/Kansai [KIX/RJBB] and Sapporo/New Chitose [CTS/RJCC] have been evaluated as the next domestic destinations (Spring Airlines Japan plans Kansai, Sapporo, and China.).

Having commenced operations in August 2014 (Spring Airlines Japan commences operations.), Spring Airlines Japan was founded given the specific mission to connect Chinese cities with the main international airport serving Tokyo, which would be difficult for its Chinese parent to accomplish due to restrictions and politics that protect government-owned Air China [CA/CCA], China Eastern Airlines [MU/CES], and China Southern Airlines [CZ/CSN]. For example, Narita – Chongqing already had Air China operating daily, while Narita – Wuhan sees twice-weekly China Southern service, so approval to enter the markets by Spring Airlines would not have come easy, and Spring Airlines Japan is the group's answer to get around with it.

Peer LCCs Jetstar Japan [GK/JJP], Peach Aviation [MM/APJ], and Vanilla Air [JW/VNL], have all omitted the Chinese market so far, due to them having small or no brand recognition in China, a higher cost base than its Chinese counterparts, and political tensions, though now to a lesser extent. Peach has mulled Shanghai for some time but has remained quiet, while Vanilla Air only recently announced its commitment to China (Vanilla Air eyes China, Southeast Asia, and Okinawa hub.). Being able to take advantage of its parent's brand awareness as well as the group's distribution channels puts Spring Airlines Japan in the best position among Japanese LCCs to serve the booming China – Japan market. While there are still more Japanese visiting China than Chinese traveling to Japan, the latter is fast increasing while the former is declining.

In other news, in December 2015, Japanese electronics retailer Bic Camera and housing firm Sekisui House announced plans to acquire stakes in Spring Airlines Japan. The former has invested 1 billion JPY to control 6% of the LCC's voting shares, and will have the airline promote its products and hand out discount vouchers eligible for use at its stores. Additionally, it may also be allocated seats for promotions. Meanwhile, the latter is looking to invest 3 billion JPY for an 18% share by the end of March. Japan's largest housing company is looking to partner with the Spring Airlines Group in opening a chain of budget hotels in Japan under the brand Spring Sunny Hotel. It would be a joint-venture (JV) between the LCC group and a Japanese real estate management company Sun Frontier Fudousan.

Source: Nikkei Shimbun, 2015 December 22nd. (in Japanese)
Source: Aviation Wire, 2015 December 22nd. (in Japanese)
Source: Nikkei Shimbun, 2015 December 23rd. (in Japanese)
Source: Aviation Wire, 2016 February 13rd. (in Japanese)

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)

Peach Aviation starts Haneda – Seoul.

On February 6th, Peach Aviation [MM/APJ] inaugurated Tokyo/Haneda [HND/RJTT] – Seoul/Incheon [ICN/RKSI] (Peach Aviation announces Haneda – Seoul.). It became their second route from the downtown Tokyo airport after Taipei (Peach Aviation inaugurates Haneda – Taipei.), which was only launched in August 2015, and their 10th international route overall. Meanwhile, Seoul will now be served from three points: Okinawa/Naha [OKA/ROAH], Osaka/Kansai [KIX/RJBB], and Haneda. All flights are operated by 180-seat Airbus A320s.

Airbus A320-214 JA813P at Haneda moments after arriving from Seoul's Incheon as the inaugural flight. Peach's fleet boasts a modest 17 A320s, with the next example not due until October this year. (Photo: Aviation Wire)

The inaugural inbound flight MM1008 departed Incheon on February 5th at 2301 KST with a full load of 181 passengers including an infant, and touched down at Haneda past midnight at 0106 JST. A320-214 JA813P was assigned. Meanwhile, the maiden outbound leg MM1009 departed Haneda on February 6th at 0207 JST carrying 173 passengers including two infants, and arrived at Incheon early in the morning at 0442 KST. There is no time difference between Tokyo and Seoul.

Flight Schedule:
Haneda – Seoul/Incheon NEW 1 daily with A320-200.
MM1009 HND 0200 – 0435 ICN 320 Daily *From Feb/6.
MM1008 ICN 2250 – 0100(+1) HND 320 Daily *From Feb/5.

As with Peach's Haneda – Taipei link, the new service to Korea also uses the heavily-regulated airport's under-utilized midnight slot-pairs reserved exclusively for international flights. Peach added a fourth round-trip between Kansai and Seoul from the same day, and after that aircraft arrives into Seoul, it turns around to become the inbound flight to Haneda. After a brief 60-minute stay, it returns to Seoul as the outbound red-eye flight from Haneda, in time for the first flight of the day from Seoul back to Kansai.

"If you feel like you're up for a Korean barbeque or beauty salon tomorrow, Peach has been providing the answer for those in Osaka. Now we'll be offering that to everyone in Tokyo," said Shinichi Inoue, CEO of Peach, who was present at Haneda on the day. "Travel has become much more affordable and Japan and the rest of Asia are now closer than ever. We're looking forward to opening up our third and fourth international routes from Haneda," Mr. Inoue continued, without naming any destinations. Haneda's current constraints confine Peach to arrivals and departures between 2300 and 0600 only, so the third and fourth will also likely be existing cities on Peach's network if it wishes not to sacrifice aircraft utilization. Hong Kong [HKG/VHHH] and Kaohsiung [KHH/RCKH] would be natural choices.

Source: Aviation Wire, 2016 February 6th. (in Japanese)

Star Flyer loads Kitakyushu – Taipei charter.

On February 4th, Star Flyer [7G/SFJ] announced that they will operate three round-trip charters between Kitakyushu [KKJ/RJFR] and Taipei/Taoyuan [TPE/RCTP] during Japan's Golden Week peak travel period in May. 150-seat Airbus A320s will be assigned. Travel agencies JTB World Vacations and H.I.S. will market the packaged tour in Japan, while an undisclosed firm in Taipei has been contracted to sell tickets in Taiwan.

Airbus A320-214 JA05MC City of Kitakyushu at Haneda. Star Flyer is considering revamping the interior of its A320s, as well as increasing seat count from 150 to 166, matching that of ANA's A320s. The current generous low-density configuration would be unsustainable if and when fuel prices go up again. (Photo: Ryosuke Yano)

In May last year, the Kitakyushu-based airline had announced that it would consider midnight international charters to regional Asian destinations from its base as well as Nagoya/Chubu Centrair [NGO/RJGG], Osaka/Kansai [KIX/RJBB], and Tokyo/Haneda [HND/RJTT], as part of its mid-term strategy dubbed Pursuit of Star Flyer-ness 2020 (Star Flyer back in black, mulls international charters.). The red-eye flights increase utilization by flying them during the midnight when most domestic airports are closed.

Flight Schedule:
Kitakyushu – Taipei NEW charter with A320-200.
7G9671 KKJ 2330 – 0100(+1) TPE 32A/320 *May/2, 4, 6.
7G9672 TPE 0230 – 0550 KKJ 32A/320 *May/3, 5, 7.

With assistance from ANA Holdings, Star Flyer successfully turned itself around in FY2014, reporting a 431 million JPY net profit for the fiscal year ending in March 2015 over a 3.04 billion JPY loss for FY2013. The parent of Japan's largest airline is Star Flyer's biggest shareholder and has a 17.96% stake, and its current President Sadami Matsuishi is an ANA veteran (New Star Flyer President is from ANA.). All routes and all but a single Haneda – Kitakyushu round-trip code-share with ANA, and the partnership generates well over 30% of the Kyushu carrier's total revenue (Star Flyer launches Yamaguchi-Ube.).

Star Flyer currently operates nine 150-seat A320s on domestic routes. Their sole scheduled international route launched in July 2012 between Kitakyushu and Busan/Gimhae [PUS/RKPK] was suspended in March 2014 due to heavy losses.

Source: Star Flyer, 2016 February 4th. (in Japanese)

Vanilla Air eyes China, Southeast Asia, and Okinawa hub.

On January 29th, Vanilla Air's [JW/VNL] owner ANA Holdings, parent of Japan's largest carrier All Nippon Airways [NH/ANA], announced that it would increase the Tokyo/Narita [NRT/RJAA]-based LCC's capacity by 218% as measured by available seat kilometers (ASKs) by the end of FY2020. It aims to become the number one LCC at Narita, going head to head with rival Jetstar Japan [GK/JJP], and also partly competing with sister Peach Aviation [MM/APJ], minority-owned by ANA.

Airbus A320-216(SL) JA06VA taxies for departure from Narita. Vanilla Air plans to add up to five aircraft in FY2016, with another dozen to be inducted by FY2020. (Photo: Ryosuke Yano)

Vanilla will add more leisure-oriented markets, including cities which have yet to be served by the ANA Group, and enter the Chinese market to tap into Japan's largest source of inbound tourists. It also envisions setting up its second hub at Okinawa/Naha [OKA/ROAH], and designating Taipei/Taoyuan [TPE/RCTP] a strategic focus city, which would inevitably increase overlap with Peach (Peach Aviation grows Okinawa; Narita and more Taipei.). Guam, Saipan, Philippines, along with Southeast Asia are on the horizon, though Osaka/Kansai [KIX/RJBB] – Taipei (Vanilla Air to add Kansai – Taipei in Summer 2016.) is expected to become the next route.

Its current fleet of eight 180-seat Airbus A320s will be grown to 25 by FY2020, and the re-engined A320neo is under consideration. Acquisition of A330 wide-body aircraft will also continue to be evaluated, but it would be necessary if Vanilla wishes to fly to Southeast Asia nonstop from Narita both ways without payload penalties. "A single-type operation is the LCC formula, but we're also evaluating a plan with wide-bodies," said ANA Holdings President Shinya Katanozaka, adding "Asian LCCs are evolving, and they're entering longer routes. We may operate two types side-by-side, or even a complete shift to wide-body-only operations in the long-term is also a possibility."

Some sources say there is already an undisclosed done deal for ANA to lease a few A330s from CIT Aerospace for deployment at Vanilla. Pleasing CIT, Skymark Airlines' [BC/SKY] fourth largest creditor after Intrepid Aviation, Airbus, and Rolls-Royce, was also necessary for ANA to win support to sponsor Japan's bankrupt third largest airline (Bye-bye Skymark, Hello ANA Airbus A380?). Meanwhile, Vanilla has become quiet on any plans to fly to Hawaii after ANA finally released plans to fly Skymark's displaced A380s to the popular resort destination. With ANA's A380s planned to accommodate 500 to 600 passengers, they would virtually be dumping seats in the market overnight, and an entry by Vanilla would result in excessive overcapacity.

Source: ANA Holdings, 2016 January 29th. (in Japanese)
Source: Aviation Wire, 2016 February 3rd. (in Japanese)

*Edited/updated on 2016 February 3rd. 

Skymark to add nonstop Ibaraki – Okinawa.

On January 21st, Skymark Airlines [BC/SKY] announced that it will add Ibaraki [IBR/RJAH] – Okinawa/Naha [OKA/ROAH] nonstop service effective April 28th. The new service will be operated daily using 177-seat Boeing 737-800s. This becomes the first new route launched by the bankrupt airline (Skymark to file for bankruptcy.) since a revamped management was installed by new owners ANA Holdings, parent of All Nippon Airways [NH/ANA], Integral Corporation, and UDS Airlines Invstment (Skymark relaunched with ANA sponsorship.).

Boeing 737-86N(WL) JA73NX at Narita. Skymark completely withdrew from Narita on October 25th, 2014 (Skymark announces Narita closure and Yonago cuts.) after losing the battle against LCCs. It currently operates 26 737s on 16 nonstop routes which mostly originate from its Haneda hub and focus cities at Kobe and Ibaraki. (Photo: Ryosuke Yano)

Japan's third largest airline currently offers a one-stop fly-through product between the two cities via Kobe [UKB/RJBE]. Making it nonstop cuts travel time from four to three hours and 15 minutes. It is not the first time Skymark has experimented with the route, having operated nonstop as a seasonal service in 2012 from July 1st to September 30th and again in 2013 from July 1st to October 26th. The last new route was Sapporo/New Chitose [CTS/RJCC] – Naha, which was inaugurated on January 29th, 2015, though it was suspended only two months later.

Flight Schedule:
Ibaraki – Naha NEW 1 daily with 737-800. (Apr/28-)
BC539 IBR 1900 – 2215 OKA 73H/738 Daily
BC530 OKA 0725 – 0955 IBR 73H/738 Daily

Skymark, which designates Ibaraki as a focus city, is the only domestic airline at the airport, flying to Fukuoka [FUK/RJFF], Kobe, and New Chitose, though operations have been downsized during restructuring (Skymark downsizes Ibaraki from September.). Ibaraki is dubbed the third airport serving the Kanto (Greater Tokyo) region, located 80 kilometers northeast of the capital, and the only LCC-friendly one in the region, boasting landing fees 30-40% lower than Tokyo/Narita [NRT/RJAA] and Tokyo/Haneda [HND/RJTT].

Once post-deregulation's most successful start-up to challenge the ANA/JAL duopoly, it is now controlled by Integral Corporation, which owns 50.1%, ANA Holdings, with 16.5%, and UDS Airlines Investment, having 33.4%. 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 further postponed, as Skymark continues to refuse to adopt ANA's Able-D reservation system. It would enable code-shares but 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]. Skymark strives to remain operationally independent until its planned re-listing in 2020, while ANA wants to keep it under its influence for as long as possible to shut out true competition at bread-and-butter Haneda.

Source: Skymark Airlines, 2016 January 21st. (in Japanese)
Source: Aviation Wire, 2016 January 21st. (in Japanese)
Source: Yomiuri Shimbun, 2016 January 24th. (in Japanese)