Qantas saves $40 million on Japanese routes

Qantas expects to save $40 million a year by replacing the former Australian Airlines Boeing 767 services to Nagoya and Osaka with Jetstar A330-200s.
The move will see Jetstar begin six weekly direct Cairns-Nagoya services, including twice-weekly Sydney-Cairns-Nagoya, from August 2 and four weekly Cairns-Osaka services from September 8.

This is in addition to a previously announced Sydney-Brisbane-Osaka service due to begin in March.

While cheaper than Qantas mainline, the Australian Airlines planes cost 25 per cent more to operate than Jetstar.

Qantas intends to keep its Boeing 767 base in Cairns open but a spokeswoman could not guarantee yesterday that there would be no redundancies.

Qantas chief executive Geoff Dixon said the Jetstar cost offering and product were better suited to the routes as Australia faced tough competition for Japanese tourists, an issue exacerbated by the depreciation of the yen against the Australian dollar.

Mr Dixon said the moves would increase capacity to Australia from western Japan by 30 per cent. He said the Australian Airlines base would continue to operate and Qantas would concentrate increasingly on Tokyo, where there was a higher business travel component.

“As we have said before, we intend to grow both Qantas and Jetstar in international markets, but we must match the appropriate cost structure and style of service to individual markets,” he said.

“While Qantas continues to be a major leisure travel provider, under its current costs it requires a significant business base to sustain profitable operations on some key international routes.”

The two arms of Qantas will offer 55 services a week to Japan, plus seasonal services to Sapporo.

These include 11 services a week between Tokyo and Sydney using A330s and 14 Tokyo-Cairns services a week.