GK Losses Increase

[yohy?!]

Jetstar Japan chief executive Miyuki Suzuki says key metrics for the airline are tracking at or ahead of where it wants them to be despite losses for the Qantas Airways budget offshoot rising by 26 per cent to ¥11.1 billion ($120 million) in the last financial year.

Read more: Qantas carrier Jetstar Japan upbeat despite 26 per cent jump in losses

Ouch..time for another capital injection?

Surprising to see the comments about how big they are - the Narita and Osaka operations are reminiscent of TT in Australia and they seem to be stuck in a 'pincer' segment between the Shinkansen at 1 end and the other domestic carriers at the other.

Think it might be slightly optimistic to think they might 1 day be larger than QFd as Jayne Hrdlicka states!

 

[nlagalle]

Ouch..time for another capital injection?

Surprising to see the comments about how big they are - the Narita and Osaka operations are reminiscent of TT in Australia and they seem to be stuck in a 'pincer' segment between the Shinkansen at 1 end and the other domestic carriers at the other.

Think it might be slightly optimistic to think they might 1 day be larger than QFd as Jayne Hrdlicka states!

They already said there would be at least 3 years of losses during the start up.

Also Jayne Hrdlicka said it could be bigger than JQd

Jetstar Group chief executive Jayne Hrdlicka has pointed to Jetstar Japan as having the potential to become a larger airline than Jetstar's domestic Australian operation in the future due to the larger size of the Japanese population base.

 

[moa999]

Not sure if you've seen Shinkansen prices - but on medium routes, Jetstar is substantially below Shinkasen prices.

Lets say NRT-cough (or Shinagawa-Hakata for JR)
Looked at around 10am on November-14 (1-month out)

Cheapeast Nozomi fare
Y21,810 (non-reserved seat) / Y22950 (reserved seat)
Travel time 5 hours

Jetstar
From Y6990 (6am flight) to Y10,000 (9-10am zone) plus Y3100 for limo bus/ train
Flight time under 2hrs plus say 1hr checkin and 1hr bus from Tokyo

 

[samh004]

Think it might be slightly optimistic to think they might 1 day be larger than QFd as Jayne Hrdlicka states!

It was compared to JQd not QFd, but seems legit considering population size.

I wonder where they could fly internationally to? Across to Hawaii or the US would make things interesting for Qantas FF's!

 

[moa999]

I suspect JQJ will ultimately fly internationally - HNL probably not a bad choice.

You already have Australia's JQi into NRT and KIX, and Singapore's 3K into KIX (via TPE)


Also of note is Vietnam's BL recent international expansion into MFM, SIN and BKK

 

[smit0847]

I think the JQ Group made a fundamental error choosing NRT instead of HND as their base. I know historically JQi have always flown to NRT but when launching GK and connecting 3K I don’t understand why they didn’t move ops to HND. Yes GK may be much cheaper than a Nozomi Shinkansen on the same route but NRT is time consuming and expensive to get to. HND makes a lot more sense for an LCC base – its closer to Tokyo and I understand the landing fees are cheaper.

Was it because of slot availability? Isn’t NRT more constrained than HND?

Similarly ITM makes more sense than KIX.

 

[yohy?!]

Not sure if you've seen Shinkansen prices - but on medium routes, Jetstar is substantially below Shinkasen prices.

Lets say NRT-cough (or Shinagawa-Hakata for JR)
Looked at around 10am on November-14 (1-month out)

Cheapeast Nozomi fare
Y21,810 (non-reserved seat) / Y22950 (reserved seat)
Travel time 5 hours

Jetstar
From Y6990 (6am flight) to Y10,000 (9-10am zone) plus Y3100 for limo bus/ train
Flight time under 2hrs plus say 1hr checkin and 1hr bus from Tokyo

Yep I did having done KIX-NRT recently on GK, incidentally your price seems quite high (and your tokyo bus time quite optimistic if going to town! ) - I saw fares substantially lower that than for the Shinkansen (in the mid teens 000 JPY) hence my point that GK will struggle to compete as its substantially more convenient to take the train than fly into international airports in both cities - that isnt to say people dont now but given they are losing money hand over fist I'm not sure its a viable business model.

 

[yohy?!]

They already said there would be at least 3 years of losses during the start up.

Shouldnt the losses be reducing towards profitability progressively if they are hitting their revenue targets?

 

[nlagalle]

Shouldnt the losses be reducing towards profitability progressively if they are hitting their revenue targets?

You might hit revenue targets but if your operating costs blow out for any number of reasons it can slow it.

 

[moa999]

cough is a lot further than KIX and the distance where air makes more sense, as more obviously for Sapporo or anywhere else on the other islands.

Would also note that I suspect for some in Tokyo a limo bus to NRT is quicker than subway to Shinagawa (granted not all).

Just saying there is a market for LCC in Japan.

That said Shinkasen could reduce pitch and go 3x3 pretty easily if they wanted to compete on price.

 

[medhead]

You might hit revenue targets but if your operating costs blow out for any number of reasons it can slow it.

Which then raises questions about the 3 year plan.

 

[Shan Man]

Im still chuckling at her name being Hrdlicka.

Hardlicka.