- CAPA Analysis
- Route Maps
- Print Summary
Jetstar Japan is a joint venture between Qantas Airways, Japan Airlines and Mitsubishi Corporation. The carrier operates from its main base at Tokyo Narita International Airport with a fleet of 3 A320 aircraft. The LCC operates domestic services to cities including Osaka, Fukuoka, Okinawa and Sapporo. Jetstar Japan's aircraft are sourced from affiliate Qantas Airways, with the fleet set to grow to 24 aircraft within its first few years of operation. The carrier plans to commence short-haul International services to key Asian cities by 2013.
Fleet: 3 x A320, 21 more in first few years
CEO: Miyuki Suzuki
- Tokyo Narita International Airport
- Osaka Kansai International Airport
- Fukuoka Airport
- New Chitose Airport
- Naha Airport
Location of Jetstar Japan main hub (Tokyo Narita Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Jetstar Japan fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
151 total articles
20 total articles
While some parts of the industry spend time seeking to define what makes a low-cost carrier or debating who is and is not a “true” LCC, most airlines are looking past labels and instead offering services that give them a yield premium and expand traffic flows.
This hybridisation of airlines that, by their own term, started as LCCs is exemplified by Jetstar. One feature that may be most contentious for a LCC to have is interline and codeshare relationships. Jetstar has three codeshare and 25 interline agreements following the main addition of Jetstar Japan codesharing with part owner Japan Airlines. This will further help Jetstar increase interline and codeshare revenue, which grew 80% in 2012.
The Jetstar Japan-JAL deal has its own nuances worthy of examination. Not only is this a partnership between one of the most adaptive LCCs and what was one of the most hardened legacy carriers, the relationship will enable JAL to expand its domestic network virtually and at a low cost, critical for high-cost JAL at a time of transformation in North Asia.
A much improved financial performance from Qantas’ international operation along with strong results from Jetstar and Qantas Loyalty has allowed the airline to return to the black, reporting a profit after tax of AUD111 million (USD113.6 million) for the first six months to 31-Dec-2012, a 164% turnaround from the same period in 2011.
All operating segments in the group were profitable with the exception of the Qantas International segment. However losses in this segment reduced to AUD91 million (USD93 million) million from AUD262 million (USD268 million).
In a generally unexciting result – not a bad thing these days – Qantas continued to show a profitable streak, with its virtuous frequent flyer programme continuing to stand out as a cash cow.
AirAsia Japan and Jetstar Japan are about six months old now and already there is significant change at the fledging carriers: AirAsia Japan has switched CEOs after sagging performance while Jetstar Japan will reduce its second base at Osaka Kansai, the home of Peach Aviation, Japan's first new LCC, which launched in Mar-2012 - suggesting Peach has efficiently maintained its presence in Japan's second-largest metropolitan area.
Peach launched with services to a number of secondary cities whereas AirAsia and Jetstar entered only trunk routes. But now Jetstar will launch some secondary city routes of its own, suggesting an evolving route network strategy as well as responding to the market with agility, which airlines – especially in Japan – do not typically have strength in.
Finally, Jetstar looks as if it will steal AirAsia's thunder by opening a base in Nagoya, Japan's third-largest metropolitan area. AirAsia since nearly its launch has talked of a Nagoya base, making it likely Asia's two leading LCC groups will continue to battle head on in Japan.
For years it was said that Japan, despite high air fares and inefficient incumbent airlines, would never be a breeding ground for low-cost carriers. Excuses were many – airport taxes were too high, there were no low-cost terminals – but the last resort claim for why LCCs would not work in Japan was that the Japanese people, used to pampering in their service-oriented society, would never accept the core principles of LCCs.
With breathtaking speed the Japanese government and companies broke down barriers to support LCCs, three of which launched in 2012. They could do everything but change public attitude about LCCs. Yet it turned out the Japanese public did not need the open-heart surgery many thought would be required. Japan's air market has been devolving on service, closing the gap between full-service incumbents and LCC start-ups. The LCCs are also not the bare-bones, service-adverse airlines many stereotyped.
This poses a challenge to how full-service carriers can maintain a yield premium, which received a bleak reminder with Skymark pulling off routes in response to LCCs entering. The Japanese experience also offers a lesson to other markets, like South Korea, Taiwan and Hong Kong, where some claim the population will not ever accept the concept of a LCC.
References to "the Southwest model" or "the Ryanair model" can be a common refrain in the low-cost carrier industry, but no two LCCs are identical. Indeed, there are a number of models that have seen success. So it comes as no surprise that Japan's nascent LCC industry is diverging, with this year's three new entrants – AirAsia Japan, Jetstar Japan and Peach – showing their future more clearly now that their operations are bedding down.
The divergence is not the result of differentiation in an over-competitive market; there is still plenty of untapped demand in Japan. Rather the nuances at the three new LCCs are reflective of different shareholders and market positions. There are different outlooks on domestic-international balances but most commonly the distinctions go to the heart of industry discourse on hybridising, adding services to tap new markets and increase yields. Jetstar Japan is set to be the most hybrid, followed by AirAsia and then Peach.
Spring Airlines, China's largest and most successful low-cost carrier, will follow in the footsteps of AirAsia, Jetstar and Tiger Airways in establishing a pan-Asian strategy to have subsidiaires outside its home market. The first will be in Japan. While Japan already has local AirAsia and Jetstar subsidiaries and Spring's strategy may appear to be merely copying other carriers' strategies, Spring's strategy is guided by other objectives.
Airlines in mainland China are heavily regulated and direct competition is limited. Establishing a foreign subsidiary, however, will give Spring more transparent regulatory frameworks to work with in order to serve international Chinese routes. The foreign bases also allow flights to third countries. With China to become the largest market for LCCs, Spring has the potential to capitalise internationally on its local awareness as well as offer access to China's domestic network, which remains something of a holy grail for AirAsia and Jetstar. But Spring will face the challenges of sophisticated IT and ancillary revenue, which AirAsia and Jetstar have a large start on.
Great news! CAPA now offers email and phone contact functionality through its partnership with Gooey. Corporate access for this feature is USD1000 per annum.