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New Airline Launches During Aviation’s Worst Downturn – Zip Air Starts Flights From Japan

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It’s the worst downturn in aviation history, with a global recovery not expected until at least 2023, yet a new airline with widebody Boeing 787 Dreamliners will make its first flight in less than two weeks.

Zip Air Tokyo intends to launch flights between Tokyo and Bangkok on June 3. The airline’s name is meant to evoke speed and addresses around the world, but branding will not matter much to its first passengers: boxes.

Human passengers were supposed to be Zip Air’s focus, but the start-up will launch with cargo-only services while countries continue to maintain coronavirus-related travel restrictions. Zip Air President Shingo Nishida said details of passenger service will be announced later.

Zip Air’s June 3 launch is already delayed from its initial May start, but there is merit to pressing ahead.

Commercially, cargo demand is strong, especially within Asia. Japan’s car manufacturers have ties to Thailand while Japanese seafood is a major export, besides other forms of freight.

Strategically, Zip Air as a new carrier needs its pilots to accumulate hours before the airline is certified for long-haul flights. Zip Air intends to make Honolulu its first North American destination.

Zip Air is not an entirely greenfield carrier: it is wholly-owned by Japan Airlines.

Additional North American destinations can help fill in gaps in the combined network of Japan Airlines and joint-venture partner American Airlines.

Las Vegas is the largest unserved Japan-U.S. destination, according to Las Vegas tourism data. Tokyo-Las Vegas traffic is largely leisure passengers out of Japan, which is Zip Air’s target niche.

Financially, Zip Air has cushioning since JAL entered the coronavirus downturn with one of aviation’s highest profit margins.

The Japan-U.S. market has been profitable and JAL has been looking to grow and catch-up to its much larger competitor, All Nippon Airways.

ANA has a joint-venture with United Airlines, which is larger than American Airlines in the Japan-U.S. market.

Combined, ANA and United are much larger than JAL and American.

ANA is using its two recently-delivered A380s to exclusively serve Honolulu, the last major market JAL has a grip on. ANA’s A380 deployment significantly increases capacity.

As a hybrid airline, Zip Air can introduce new price points and service offerings in the Japan-North America market.

Its initial fleet of 787-8s are older models from JAL being given a new hybrid interior. Economy class will not have TV screens in the seats, but there will be a lie-flat premium class offering.

Zip Air is lower risk than South Korean start-up Air Premia, which has no parent airline shareholder to lean on. It intends to launch this year with all-new 787-9s competing on mid-haul and long-haul flights with Asiana Airlines and Korean Air.

Air Premia is one of three start-ups Seoul approved last year. Aero K has delayed its launch with A320s while Fly Gangwon started 737 flights in late 2019.

Taiwan’s Starlux Airlines commenced flights on January 23, the day Wuhan entered a lockdown. Starlux already amassed a launch fleet of three A321neo aircraft, which have since become under-utilized. Fortunately it had not taken delivery of additional aircraft, including more expensive widebody aircraft.

Outside of Asia, timing has proven ironic for Berlin Brandenburg Airport. The new airport was supposed to open in 2012 but had been repeatedly delayed. It is now set to open in October.

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