Virgin Australia plans to commence daily flights to Tokyo’s Haneda Airport and launch a new partnership with Japan’s All Nippon Airways (ANA). Based in Japan, ANA has a 5-star Skytrax rating and is a member of Star Alliance.
Subject to regulatory approvals, Virgin would commence daily flights from Brisbane to Haneda from 29 March 2020 using Airbus A330-200 aircraft.
The new services will add significant competition to the Australia-Japan market. Virgin is promising a full-service experience for customers on the Tokyo flights, which will even be crewed by a Japanese ambassador who will “provide an outstanding customer experience for our Japanese guests and share local knowledge with Australian residents visiting Japan.”
Although there is significant passenger demand between Queensland and Tokyo, freight also forms a part of Virgin Australia’s business case.
Virgin Australia to partner with ANA
As part of the new strategic alliance with ANA, Virgin Australia will be able to offer 38 codeshare destinations in Japan to feed its Brisbane-Haneda service. ANA will place its “NH” code on the Brisbane-Haneda flight, while Virgin Australia will codeshare on the ANA Sydney-Haneda and Perth-Narita routes. ANA will also codeshare on selected Virgin Australia domestic routes within Australia.
Virgin Australia’s partnership with ANA will also bring benefits for frequent flyers when it launches in March 2020. Virgin Velocity Gold and Platinum members will have access to priority check-in, baggage, boarding and lounges when flying with ANA to Japan. Presumably, you’ll also soon be able to earn and redeem Velocity points for ANA flights – although Virgin has not specifically confirmed this in its application.
Virgin wants to fly to Haneda Airport
The availability of two new take-off and landing slots at Tokyo’s Haneda Airport is behind Virgin Australia’s plan to launch new flights to Tokyo. Virgin Australia is applying for one of the two airport slot pairs. Qantas has already applied for both, which it would use to launch a second-daily Sydney-Haneda service and to switch its Melbourne-Narita flight to Haneda Airport.
Virgin could launch flights to Narita, Tokyo’s second airport, at any time. However, it says it is only interested in flying to Tokyo if it can land at Haneda Airport. Haneda is more convenient for business travellers than Narita, and is also a major hub for ANA.
In its application to the International Air Services Commission (IASC), Virgin Australia writes:
In addition to the fact that Haneda is in close proximity to the Tokyo metropolitan area, one of the world’s most valuable passenger markets, Haneda is the key domestic hub for our partner ANA. Our ability to access ANA’s extensive network will be a critical factor in our ability to compete effectively on the Japan route. Virgin Australia would not be prepared to commence services to Japan if our only option to serve Tokyo was through operations to Narita, as we would not have the ability to leverage our partnership with ANA (ANA offers 38 domestic code share connections to/from Haneda, compared to only five at Narita).
Qantas, in its application, said:
Qantas’ plans to utilise the daytime Haneda frequencies do not deny competition from other Australian carriers. There are no constraints at Narita or any other point (with the exception of Haneda) under the air services arrangements between Australia and Japan, where capacity is unrestricted.
Qantas the “only no-risk option”?
The new slots at Haneda Airport, which are rare, must be fully-utilised by 29 March 2020 or there is a risk they could be reallocated to non-Australian airlines. In its application for both slot pairs, Qantas claims that it is the only “no-risk” option to commence new flights to Haneda by March next year:
Allocation of capacity to Qantas, as outlined in this application, will have a positive impact on competition, tourism and trade and is therefore of benefit to the public and wholly consistent with the objective of the Act. Qantas is also the only no risk option to meet the requirement for this allocation of capacity to commence services to Haneda on 29 March 2020.
However, Virgin Australia has rubbished this claim, saying it has been preparing to launch flights to Tokyo for months:
Preparations for our entry to the route have been underway for many months. If Virgin Australia is awarded the allocation of capacity we are seeking, flights will commence on 29 March 2020.
Any suggestion that Virgin Australia will not be able to launch flights on 29 March 2020, or lacks the commercial capability to set up our services for success in the future, is mere conjecture.
Virgin Australia argues that its entry to the Japanese market would significantly increase competition and result in lower airfares for passengers. Qantas and Japan Airlines, which are Oneworld alliance partners, currently control 90% of market share between Australia and Japan.
Qantas now has until 2 October to respond to Virgin Australia’s submission, and the IASC will make a final decision by the end of October. Given a past IASC decision to block a codeshare agreement between Qantas and Cathay Pacific which it deemed anti-competitive, and the obvious public benefits of Virgin commencing flights to Japan, we expect the commission to grant Qantas and Virgin one slot pair each.
Join the discussion on the Australian Frequent Flyer forum: Airlines eye new slots at Haneda (Tokyo)