Peach Aviation profits overshadowed by Jetstar Japan & Skymark losses in Japan's changing market

Japan's Peach Aviation has reported its maiden profit after just over two years of operations. At a 6.5% operating margin, Peach's performance was better than part-owner All Nippon Airways' 4.1% operating margin. Peach's profits are over-shadowed by large losses at Jetstar Japan, which recorded a negative 36.8% operating margin compared to part-owner Japan Airlines' 12.7% margin; JAL Group has Japan's highest-margin and lowest-margin airlines. Jetstar Japan's performance was worse than losses at Skymark and smaller StarFlyer.

Jetstar Japan is on the mend after launching its Osaka Kansai base that has boosted aircraft productivity, which at one point was half that of Peach's. Peach's utilisation is coming down while Spring Airlines Japan continues with heavy under-utilisation.

Jetstar Japan was one of only two carriers to show yield growth in 1Q2014. Jetstar is slowing its growth while Peach expects to continue the conservative but steady growth that has been its hallmark.