Virgin Australia has upped the ante with Qantas by claiming one of two of the new Japan Tokyo Haneda slots issued to Australia. Qantas had previously said they wanted both slots for routes from Melbourne and Sydney.
What are the details?
As part of the lead up to the Tokyo Olympics in 2020, the Japanese government has made an effort to open 50 new airline slots to Tokyo Haneda, splitting them amongst domestic carriers and international airlines. Australia has been awarded two slots, and with only two Australian international flag carriers it seems like a simple split of one each.
“The Japanese Government has announced its intention to open up 50 additional daily slot pairings at Tokyo-Haneda airport from the end of March 2020, which will be split equally between Japanese carriers and foreign carriers.” – Virgin Australia Press Release
However, Qantas immediately claimed both slots for routes departing Sydney and Melbourne, with a statement to Executive Traveller that “Qantas is also the only no-risk option to meet the requirement for this allocation of capacity” alluding to Virgin Australia’s recent financial losses.
Virgin Australia rebutted with their own claim for a single slot a few hours later, claiming that giving both to Qantas would reduce competition and push Virgin Australia out of the market.
“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.”
What the route proposal details?
Unlike the Qantas proposal, the Virgin Australia application lacked details, such as aircraft, time frames or even a departure city (although we bet Sydney or Melbourne). But Virgin Australia sees the possible new route as a cornerstone offering in their portfolio.
“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.”
Simple Flying reached out to Virgin Australia but had yet to receive a reply at the time of publishing.
Both Qantas and Virgin have (or about to) submit proposals to the International Air Services Commission (IASC), with the slots expected to be awarded by the end of October this year. The slots will be usable in Summer 2020.
How will Virgin Australia operate this route if they win it?
There is one unknown question, however. With no additional long-haul aircraft on the Virgin Australia order book (they only have a postponed 737 MAX order), the airline is lacking the tools to make this route happen. Rumor has it that their Sydney to Los Angeles route is profitable, so they’re unlikely to sacrifice that particular cash cow.
We could predict that they would shuffle one of their aircraft from their Hong Kong route. With the recent protests in Hong Kong, traffic is down, and it is possible Virgin Australia will use this as an excuse to slot the A330 aircraft into their new Tokyo route.
One suggestion is that they could reduce their Sydney to Hong Kong frequency to four days a week and Melbourne to Hong Kong to only three days a week. This would free up an A330 which could fly to Toyko (with the remaining A330 serving both Hong Kong routes).
Alternatively, the airline could rent an extra aircraft (or code-share) from a partner airline, such as ANA. But seeing their last financial statement, it does seem they would rather make their current fleet work before they decide to expand fleet operations.
What do you think? Would you fly on the new route to Tokyo? Let us know in the comments!