Virgin Australia to make its case for Tokyo Haneda slot

written by australianaviation.com.au | September 17, 2019
A file image of Virgin Australia aircraft at Sydney Airport. (Rob Finlayson)
A file image of Virgin Australia aircraft at Sydney Airport. (Rob Finlayson)

Virgin Australia says it is seeking one of the two new slots available to Australian carriers for Tokyo Haneda airport to launch nonstop flights to Japan.

The airline said on Tuesday it would soon lodge an application with Australia’s International Air Services Commission (IASC) to be allocated a slot at the close-in Tokyo airport.

“Virgin Australia’s intended application for slots at Haneda Airport is extremely important to ensure there is competition in this market to bring choice and value for consumers, with lower airfares and more travel options to Japan,” Virgin Australia said in a statement.

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“The airline is focussed on investing in the right routes that are commercially profitable and introducing Japan to its network will benefit the business, guests and the broader tourism industry.”

Earlier in September, the Japanese Ministry of Land, Infrastructure, Transport and Tourism (MLIT) allocated a total of four new slot pairs for Australia-Tokyo Haneda routes, comprising two new slot pairs for Japanese carriers – one for All Nippon Airways (ANA) and one for Japan Airlines – and two new slot pairs for Australian carriers.

The allocation was among a package of 50 slot pairs for international services at Tokyo Haneda, with 25 for Japanese airlines and 25 for international carriers.

Also, the slots would be for daytime services – notionally between 0600 and 2255 – as air traffic managers opened up more airspace in the Tokyo area to support the additional flights.

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The IASC, which manages Australia’s international traffic rights, said on September 3 it was aiming to allocate the two Tokyo Haneda slots by October 31 2019, in order to enable Australian carriers to begin flights from March 29 2020, the start of the 2020 northern summer scheduling period. It described the deadline as a “tight timeframe”.

While Virgin Australia did not cover potential routes or aircraft type, the airline’s application to the IASC – which was likely to be lodged by September 24 at the latest – was expected to offer more details on its proposed Tokyo Haneda operation.

“Japan is a very strong and important market for both inbound and outbound travel to Australia, with travel volumes growing by almost 50 per cent since 2015,” Virgin Australia said, adding that Tokyo Haneda was a popular entry point into Japan because of its close proximity to the city.

Currently, Virgin Australia’s international network comprises short-haul destinations in New Zealand, the nations of the South Pacific and Denpasar in Indonesia, as well as long-haul flights to Hong Kong and Los Angeles.

Its widebody fleet sits at 11 aircraft – five Boeing 777-300ERs that are used on flights to Los Angeles from Brisbane, Melbourne and Sydney, as well as six Airbus A330-200s that operate to Hong Kong from Melbourne and Sydney, between Sydney and Nadi, and on nonstop services from Perth to Australia’s east coast capitals.

Could Virgin Australia Airbus A330-200s be headed to Tokyo Haneda? (Rob Finlayson)
Could Virgin Australia Airbus A330-200s be headed to Tokyo Haneda? (Rob Finlayson)

Tokyo Haneda Airport had previously been predominantly used by Japanese carriers as a domestic airport. However, there have been efforts to expand the number of international services at Haneda amid a Japanese government push to attract more tourists to the country.

In addition to being much closer to central Tokyo compared with Narita’s location on the eastern side of the city, Haneda also offers a host of potential connections to other destinations in Japan.

While Virgin Australia has signalled plans to apply for one of the two new slot pairs, its rival Qantas has lodged an application to the IASC for both slots.

The two slots would be used to add a second daily Sydney-Tokyo Haneda flight and switch its Melbourne-Tokyo Narita service to Tokyo Haneda.

Qantas said in the submission to the IASC its plans to add flights to Tokyo Haneda did not deny competition from other Australian carriers, noting there was unrestricted capacity for operating into Tokyo Narita and other points in Japan under the current air services agreement between the two countries.

Currently, there were nine nonstop routes between Australia and Japan operated by four carriers – Sydney-Tokyo Haneda (ANA and Qantas), Sydney-Tokyo Narita (Japan Airlines), Sydney-Osaka Kansai (Qantas), Melbourne-Tokyo Narita (Japan Airlines and Qantas), Brisbane-Tokyo Narita (Qantas), Gold Coast-Tokyo Narita (Jetstar), Cairns-Osaka Kansai (Jetstar), Cairns-Tokyo Narita (Jetstar) and the recently commenced Perth-Tokyo Narita service from ANA.

And there is new capacity coming later in 2019, with Qantas scheduled to operate a seasonal Sydney-Sapporo nonstop flight with Airbus A330 equipment between December 2019 and March 2020.

While Virgin Australia does not fly to Japan with its own aircraft, it sells codeshares flight between Australia and Japan operated by its alliance partner Singapore Airlines (SIA).

Virgin Australia flies Boeing 777-300ERs from Brisbane, Melbourne and Sydney to Los Angeles. (Rob Finlayson)
Virgin Australia flies Boeing 777-300ERs from Brisbane, Melbourne and Sydney to Los Angeles. (Rob Finlayson)

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24 Comments

  • Mark

    says:

    One slot pair each for QF & VA is the only way to go without making a mockery of the competition regulator.

    • Danny

      says:

      Why do you feel that is the only solution? As the article says there are unrestricted slots at other Tokyo airports for QF or VA to go to?

      Genuine question as my knowledge on which Tokyo airport is the most important is non-existing.

  • Phil

    says:

    But virgin has no partner in Japan or anywhere in North Asia for that matter so I don’t see the benefit here. If they really want Tokyo flights why couldn’t they have just started flights to Narita as a stepping stone to see how it goes.

    • Scott

      says:

      Virgin are already Partners with ANA. They should be allocated a slot period. They won’t have their airline decisions dictated to by Qantas.

      • ROB

        says:

        Virgin Australia and ANA are ‘Interline Airline Partners’ Only.
        This only mean that if you are booked on a single ticket by a travel agent you can use Virgin Australia’s free terminal transfers bus at Sydney T2 (airside near gate 48) to ANA’s International flight at SYD T1. Or you can also take the Sydney Airports T-Bus which is now free between Domestic and International Terminals
        Additionally, you can also check through your bag to the final destination if under the same booking (EG: MEL to SYD on VA; then SYD to HND on ANA, you could check your bag all the way through to Tokyo at Melbourne)
        It is a possibility that this partnership could expand to have more benefits like: shared ticket sales and/or frequent flyer benefits. If Virgin Australia is granted one of these slots, only time will tell.

  • Teiemka

    says:

    It’s unlikely that QF will get knocked back for a MEL – HND slot.

    I don’t agree with the previous comment, would it be a bigger mockery assigning a slot to an airline that has never shown an inkling to operate to Japan, cant make money on it’s international network and has an ownership structure that is either aloof or incapable of any strategy ?

    “For other potential applicants without an existing operational footprint, there is a risk that regulatory requirements to launch services to Japan may not be completed in advance of NS20. These requirements include, but are not limited to, slots, security, safety, operations specifications, regulatory, schedule and business registration.”

    Add to that they will need a codeshare with ANA for feed to be ready by March 2020, regardless of the quite sizeable O&D market.

  • Red Cee

    says:

    Was Japan on Virgin’s radar prior to this announcement? If so, why hadn’t some form of announcement been made previously? Also, which other international services are going to be axed to enable them to fly to Haneda if it is approved? Or, are Virgin simply trying to make a name for itself with the Australian public?

  • Rod Pickin

    says:

    You have to feel for VA at this time; to not apply for a slot would send the wrong message and, if they do, have they currently the equipment to service the route effectively and profitably, I think not. Logically more A330’s would be needed to service that route and that increased sized fleet would then be able to service say the Bali and some of the Pacific markets, HNL? too releasing the 737 for other more suitable tasks Clearly SIN would be out of the question at this stage but logically VA would need to seek opportunities in the far east markets apart from HKG, Japan would be a good fit. The problem then is, ex SYD or MEL direct or via BNE.

    • Phil

      says:

      I totally agree. What I think Virgin should do rather than just chasing QF is perhaps launching flights into Incheon instead. QF don’t currently fly there and it is a amazing airport. Virgin could then partner up with Korean Air to funnel passengers to Japan or Hawaii.

  • Megahead

    says:

    A lot of armchair experts here…..

  • Lechuga

    says:

    Let’s just hope this doesn’t means both the slots go via $$ydney, it’s about time Melbourne got a HND slot and going to Sydney to get to it is yuck, rather go via NRT or any other airline.

  • Craigy

    says:

    If Virgin do get one of the slots and makes a loss for the 2019/20 financial year, I can see startup costs for the new route as being part of the excuse.

  • Peter Ritty

    says:

    I do not think Virgin should get it. They are in deep trouble. You must be desperate to offer SYD/LAX $899.
    Me, I know its prob impractible due JQ Japan connex with JQ ex CNS as they both operate to NRT.
    But If Jetstar could use one of the ports , being a budget carrier would gain. The cost ex NRT to TKO cbd is about 3000 Yen. Add all costs and it would be beneficial for them @HND.
    Just a thought but JQ would also gain pax numbers to/from Japan.
    I should still be working for an airline. Guess the authorities will give it to Virgin,saying gives competition . Yes , but they never understand.

    • Robert

      says:

      Not desperate at all on this route, it’s profitable for VA. The airline makes money, just has a high cost-revenue and debt-equity ratio – all which is being corrected. Opportunities like HND will make money, so VA finally have someone in charge who knows what they’re doing. Looking forward to the future.

  • Alpha141

    says:

    If Qantas can use 4 Dreamliners on rotation to do LA, Melb, Perth and London and return etc. It wouldn’t be too hard to use their existing for something similar up to Japan. It might only need 3 A330s. 2 up to Japan and back..1 in domestic. 2 others for HK plus domestic links. It might actually utilise them better. As overnight etc. Imho.

    Japan has been pretty closed off etc. This would make it very attractive to link up with once they get one which would thus generate potentials. The business stuff would come together WITH the foundational opportunity. The Gov will want competition to Qantas. Definitely. A strong Virgin is needed domestically.

    Maybe Virgin should make Melb a bigger hub vs Syd with Qantas. Brisbane though with the second runway coming on and proximity/ geographic wise is a better fit to feed into domestic. But the Melb ie to me is the link you guys want up to Japan. Being a variable unique for the market at present. Would make a good business case.

    It would be strange if Virgin didn’t get it and Qantas gets 2 links. Nice seeding of the risk for the competition in the Qantas application.

  • Red Cee

    says:

    Do Virgin have the planes to operate this new HND service if approved? Would they be able to meet the tight time frame? (This last comment also applies to Qantas). If Virgin don’t have the spare plane to operate the service, which route is going to be reduced to enable them to fly to HND? Also, the slot is for a daily service, can Virgin fulfill this?

    • Mark

      says:

      They would take one of their existing A330’s off the domestic network to facilitate Tokyo.

  • Chris

    says:

    It’s funny how people ask if VA have the aircraft – yes. Perth A330s will be used just like they were for HKG. Quite simple really. Fits well with the small percent capacity reduction and aircraft efficiency plans. Also in 1.5 years the Max10s will be doing Perth and further A330s used on more economical, longer international routes. Japan will make money for any carrier at present and given the tourism and booming economy (and Olympics). Virgin have acknowledged how many people go to Japan on their partner airline and are confident in further stimulating the market. And a further ANA partnership is very possible. I’m confident the airline will be turned around financially not next year, but from the year after. LA makes money. NZ, HKG and other international flights not at present. And hopefully Japan will assist that profit.

  • Virgin have already stated All their routes are under review. That would include cancelling some or down grading the aircraft flying the route. I can see after this review Virgin will have the aircraft needed to fly there. Hopefully from Melbourne

  • Red Cee

    says:

    Virgin have stated they want to bring competition to the market. There is your answer, and reason they want to fly to HND. Question remains, why are they only announcing this now when another slot has come up?

    • Sam

      says:

      Because sometimes when an opportunity arises, you must take advantage of it. As someone said the Max10s arrive and will move A330s to international operations then. But this opportunity has forced VA to ask sooner.

  • Mick D

    says:

    Why would Vigin get it? HUGE Debt problem, restructuring, fleet changes that dont make sense, and an ever changing managment structure; Smells like instability to me, and the Japanese wont like that for the 2020 Olympics, let alone being strung along by VA promises when they cant even get their own backyard fixed!

  • Elliott

    says:

    Airports don’t care about profit. It an airline goes belly up, another airline will simply take the slot. VA is turning around their revenue has increased but their costs and debt has gotten too high. This CEO had a big job on his hands but he’s the right person for the job. VA will be fine. Other positive changes are coming very soon – watch this space!

  • Jake

    says:

    So glad my airline of choice is expanding. Will be one of the first to book to HND on VA! I’m sure it’ll be from Brisbane though, makes sense.for connections and competition.

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