Japan challenge for Aust
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Japan Airlines has entered into a codeshare agreement with Qantas low-cost offshoot Jetstar for its new international services but a Jetstar spokesman told TD yesterday that JQ routes from Western Japan are “under existing review for future scheduling period in terms of the appropriate capacity levels”.
Inbound operators in Queensland are concerned about a drop in frequencies, particularly on the Nagoya-Cairns route which brings down significant numbers of leisure travellers from Japan.
Qantas head of commercial Rob Gurney said Japan continues to be a “most challenging market”. Jetstar’s business plan, formulated when there was about 80 yen to the dollar, saw profit being generated up to about 94 yen to the dollar.
But at the moment it’s more like 101 yen to the dollar, and JQ is projected to lose up to A$2m per year on the route. Jetstar spokesman Simon Westaway told TD at Australian Tourism Exchange yesterday that even with Jetstar’s “40 percent plus cost advantage over Qantas on long-haul operations” the currency issue is still significant.
Gurney said the carriers were finding that the Japanese market was more sensitive to exchange rates than to air fare costs.
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