Japanese low-cost carrier Skymark to operate A380 with just 394 seats

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Japanese low-cost airline Skymark Airlines has signed a memorandum of understanding with Airbus for the purchase of four A380s and the option for two more. The official agreement will be signed in spring 2011 and Skymark has also indicated it may order a total of 15 A380s. The airline plans to introduce six A380s between 2014 and 2017, and add nine more after 2018. Skymark is the first low-cost carrier in the world, and the first airline in Japan, to order the superjumbo.

394 seats, business and premium economy class only
Skymark’s President Shinichi Nishikubo, who owns 49 percent of the airline, also told media that the airline will fit the A380 with just 394 seats in a two-class configuration – the least-dense configuration announced for the A380 by far. Skymark’s A380s will be fitted with 114 business-class seats on the upper deck and 280 premium economy seats below. No economy class will be offered. Business Class will be equipped with angled lie-flat seats at 60″ pitch and 20.7″ width, while ‘shell-style’ seats at 38″ pitch and 20.5″ width will be offered in Premium Economy. With 450 seats, Qantas is currently operating the A380 with the lowest seat-density, but the A380 typically seats 525 and is certified to carry up to 853 people. See here for an overview of A380 seating configurations currently in operation.

Competition
Skymark intends to use the A380s on a number of long-haul trunk routes, such as Narita to London, Frankfurt and New York, with Honolulu, Los Angeles, Vancouver, Melbourne, Singapore, Bangkok and Rome also on the radar. The low-cost airline will receive its first A380 in September 2014 and intends to start flights to London in November 2014 with roundtrip business-class tickets priced at 300,000 yen (EUR2,600/USD 3,600), compared with about 700,000 yen currently offered by Japanese airlines. Frankfurt and New York routes will be added by fiscal 2017. Skymark plans to acquire the A380s as it develops an international route network at a time full-service rival Japan Airlines is struggling and the Japanese aviation market is being liberalized. Skymark’s decision to step up the competition is also part of a wave of new low-cost competition in Japan. In recent months, AirAsia X, Jetstar, Cebu Pacific, Shanghai-based Spring Airlines and three South Korean budget carriers have all started or expanded service to Japan.

Ambituous plans
Skymark saw its shares tumble with 16 percent after announcing the USD1.9 billion (at list price) A380 deal amid concerns about how it will finance the purchase. However, shares in the airline rapidly recovered after it said it would pay cash for the first two A380s and lease two more. But analysts remain worried, “I have a lot of concerns about Skymark’s plan to buy A380s,” an analyst at Mitsubishi UFJ Morgan Stanley Securities told Bloomberg, “How are they going to cope if fuel prices surge? They need pilots with completely different licenses. It’ll cost more for maintenance. Fixed costs per seat are going to increase.” Skymark currently flies about 3 million passengers annually on domestic routes and also operates international charter flights to Seoul and Guam. The airline plans to increase its fleet of 16 Boeing 737-800s to 25 planes during the next two years by leasing aircraft.

Related articles:
Asia-Pacific long-haul low-cost airlines getting ready for further expansion
New long-haul low-cost airlines prepare for take-off in Scandinavia
Emirates orders 32 more A380s, grows A380 fleet to 90 aircraft

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