Japan's MLIT stated (09-Sep-2011) it would commence aviation talks for an open skies agreement with Canada in Vancouver on 13/14-Sep-2011. With the exception of the US, this will be the first open skies negotiations with a country outside east Asia and the ASEAN group, with which MLIT has almost completed conclusion for agreements.
Japan to commence open skies talks with Canada
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Qantas dominated 1990s/2000s tourism boom from Japan, but is disadvantaged in current Chinese influx
The shape of Australian tourism has undergone structural change over the past decade to the detriment of Qantas. In the 1990s and 2000s Qantas dominated a very large Australia-Japan market, made possible due to its cost base being significantly lower than those of Japanese airlines. Qantas accumulated over 11% of revenues from Japan alone.
But as Japanese capacity halved between 2005 and 2013, Chinese capacity tripled and overtook Japan in 2011 as Australia’s largest North Asian market. Qantas’ fortunes have changed: its higher cost base compared to Chinese peers (and limited network) means it has less than a 20% share of the Australia-China market. Qantas today still has more capacity to Japan than China. While there are growth opportunities for Qantas in China, they are limited. Qantas will be overshadowed by Chinese carriers, and Qantas will operate in the shadow of the glory days of the Japan boom.
The context is Australian but the implication is global – and profound: full-service carriers with a lower cost base and the advantage of what will be the world’s largest domestic market can shift the balance of traffic.
Air Canada’s improved positive 1Q2014 outlook is encouraging as it works towards long-term stability
Canada’s largest airline Air Canada has revised its outlook for 1Q2014 to a slightly more favourable performance after its cost and revenue metrics beat initial expectations.
Air Canada’s encouraging revisions to its 1Q2014 projections are against a backdrop of a falling CAD against the USD, which is creating mixed results for the carrier. The outlook of Air Canada’s rival WestJet is markedly different – it expects costs to rise and unit revenues to remain flat or increase slightly during 1Q2014 as it believes currency fluctuations will dampen its results.
The operation of higher density aircraft, protections in place to combat the swings in Canada’s currency and tempered capacity growth helped Air Canada change its outlook for 1Q2014, but the carrier is still expected to report a quarterly loss. After the initial excitement of better-than-expected cost and revenue performance wears off, the loss is what will linger in investors’ minds.