Why Do Australian Airlines Want Haneda’s New Slots?

There was a ripple of interest when Japan’s Ministry of Land, Infrastructure, Transport and Tourism opened up four slot pairs at Haneda Airport for flights to Australia earlier this month. Passenger numbers on flights between Australia and Japan are growing fast with ANA, JAL, Qantas and Jetstar all offering direct flights between the two countries.

The competition is fierce but the Australia-Japan market is a lucrative one. Photo: PJS2005 via Wikimedia Commons.

Two valuable daytime slot pairs were made available to Australian airlines. On Tuesday, media reports confirmed that Qantas was applying for both slot pairs. However, in a move that surprised many, Virgin Australia also put its hand up for a pair.

Why do Australia’s airlines want Haneda’s new slots?

The Australian-Japan flight corridor is growing 

To start with, business is booming on flights between Australia and Japan.

In 2018, 1,469247 passengers flew between Australia and Japan. According to the Australian Government’s BITRE statistics, it is the 10th busiest flight corridor in and out of Australia. Passenger numbers on the Australia-Japan route grew 8.4% between 2017 and 2018.

There were 6355 flights between the two countries in 2018 with 1,780 978 seats available. A healthy 83.5% of those seats were utilized.

The table below gives a break down of passenger numbers, flights and seat utilization across the four airlines that fly between Australia and Japan in 2018.

Source: Bureau of Infrastructure, Transport, Cities and Regional Development.

The Qantas Group, with its mainline services and low-cost carrier subsidiary, Jetstar, has the majority of flights between the two countries. Qantas mainline offers daily Melbourne-Narita-Melbourne flights on an A330-300, daily Brisbane-Narita-Brisbane flights on an A330-300, and daily Sydney-Haneda-Sydney flights on a 747-400.

Jetstar offers Gold Coast-Narita-Gold Coast, Cairns-Narita-Cairns, and Cairns-Osaka-Cairns flights using their Boeing 787-8s. 

Lower yielding leisure passengers are being funneled onto Jetstar when heading to Japan. Photo: Damien Aiello via Wikimedia Commons.

Between Jetstar and mainline Qantas, they operate 66% of the flights between Australia and Japan with significant seat utilization rates.

Japan Airlines offers daily Sydney-Narita-Sydney and Melbourne-Narita-Melbourne flights using Boeing 787s. The Sydney flight is a long-standing one, but the Melbourne flight is relatively new. JAL operates 22% of the flights between the two countries.

The smallest player flying between Australia and Japan is All Nippon Airlines. They have a daily Sydney-Haneda-Sydney flight using a Boeing 787-9 and have just started Perth-Narita-Perth using a 787-8. ANA’s relatively small market share should pick up with the commencement of its Perth flights.

Virgin Australia thinks starting flights to Haneda will benefit passengers, tourism, and the airline. Photo: BriYYZ via Flickr.

To date, Virgin Australia hasn’t flown to Japan. But Virgin wants that to change.

A Virgin spokesperson told Simple Flying that it believes flying to Haneda will benefit passengers, the broader tourism sector, and the airline. This is significant in light of Virgin Australia’s route and cost review.

“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.

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.”

Why the demand for the slots?

The healthy seat utilisation rate and growing passenger numbers on services between Australia and Japan suggest the short to medium-term prospects of the flight corridor are healthy.

With the snow bunnies and the leisure traffic steered towards Jetstar, traffic on Qantas, JAL, and ANA is skewed towards the high yielding, profitable, corporate and premium passenger segments

Securing a piece of the action is a tempting proposition for any airline.

Sydney-Haneda-Sydney is one of the few remaining Qantas routes still using the 747-400. Photo: Unknown via pxhere.

In addition, slots at any of Tokyo’s airports are notoriously hard to secure. The existing slots Australia has at Haneda (utilized by Qantas and ANA) can only be used between 22:00 and 06:00. This works okay with the corporate heavy loads on Qantas landing in either Sydney or Haneda in time for a full day’s work. But the slot restrictions have meant daytime arrivals and departures in Haneda were an impossibility.

But the two available slot pairs are daytime slots – making them especially valuable. It would allow Qantas to offer both day and night services between Haneda and Sydney. It would also allow Virgin to start a flight to Japan with passenger-friendly arrival and departure hours.

With two slot pairs available for Australian airlines and two slot pairs available for Japanese airlines, we can expect to see significant developments and changes in flights between Australia and Japan in 2020. New routes, increased services and more competition is good news for passengers.