Sydney-Osaka is “Skyscanner Unserved Route of the Week” ‒ over 275,000 searches; Jetstar’s next Kansai connection?

Strewth! With 275,000 travellers searching Skyscanner for Sydney-Osaka flights just imagine what the real demand is if you added in other search sources – 1,000? 1,500 per day? Take note Virgin Australia Airlines, Jetstar, Qantas, All Nippon Airways, and Japan Airlines – you must all have a “few kangaroos loose in the top paddock” not to jump at this one.

With over 275,000 searches in the last year, a potential city pair from Sydney to Osaka has been identified as this week’s “Skyscanner-anna.aero Unserved Route of Week” – a powerful analysis based on aspirational data captured from the Skyscanner.net flight comparison site used by +60 million unique visitors per month. “The Japan market has been one of Sydney’s standouts lately with significant growth rates over the last few years,” says Dave Perring, Head of Aviation Services, Sydney Airport. “O&D traffic grew 28% in 2016, and the market also had a strong compound annual growth rate of almost 10% over the last four years.”

Source: Skyscanner.

anna.aero requests Qantas or Jetstar to jump onto this route

Skyscanner demand on this week’s unserved route shows a bias towards the Australian end of the city pair, with a 59/41 split, so on this basis we looked at potential carriers at the Sydney end first. Maintaining its pledge to hold over a third of seats in the Australian market, Qantas is the biggest carrier at the airport, commanding 34% of weekly seats according to OAG data for the week commencing 2 May. The airline currently offers 44 non-stop services from Sydney, of which 23 are on domestic connections. Qantas’ remaining 21 destinations are therefore international, with one airport already served in Japan, this being a daily operation to Tokyo Haneda. Although it does not currently offer any non-stop flights to Osaka from across its network, surely a service from the airline’s biggest base (in terms of weekly seats) is the most likely Australian airport to receive service on this international city pair.

Sydney’s second largest carrier is Virgin Australia Airlines which holds a 21% share of weekly seats, ahead of Jetstar in third, with 13% of weekly seats. For the former, Sydney is also its biggest base in terms of weekly seats, however it does not currently offer any flights to Japan from any of its bases. While Virgin Australia’s seven-destination international network from Sydney does include a daily service to Los Angeles, the remainder are limited to regional points, with just one in Asia – to Denpasar. Jetstar’s seven-city non-stop international network from Sydney has broadly the same scope, with one US point (Honolulu), two in Asia (Denpasar and Phuket), and the rest being regional routes. Qantas’ in-house LCC does at least have existing experience in the Japanese market, including operations to Osaka. It has daily flights from Cairns to Japan’s second largest metropolitan area, as well as daily flights from Gold Coast and Cairns to Tokyo Narita. On this basis, it might be an internal battle between the two Qantas airline family members for the opportunity to serve this prospective route, unless Virgin Australia sneaks in there first!

Considering the Japanese end of the route, the potential carriers at Osaka Kansai were contemplated next. Although, it is still sometimes (bizarrely) referred to as Osaka International, or more commonly as Itami, the airport’s present 23 scheduled destination network is completely made up of domestic points. For that reason our analysis on a potential route to Sydney focuses on it being launched from Kansai. The airport’s capacity is led by an LCC, with Peach Aviation holding around 14% of weekly seats. While its 16 routes do feature six international sectors – Hong Kong, Taipei Taoyuan, Seoul Incheon, Kaohsiung, Shanghai Pudong and Busan – it has not yet ventured outside of the region. All Nippon Airways (#2; 9% share of weekly seats; not including subsidiaries) and Japan Airlines (#3; 4.8%; no subsidiaries) both operate on longer international sectors, however the seven and five-destination respective networks are yet to include an Australian point from Kansai. As a result of the current market dynamics, all three main Japanese carriers at Kansai are perhaps less likely than their Australian counterparts to consider a Sydney service at this moment in time, but at least two should not be ruled out completely.

Tokyo, Cairns control transfer market

When looking at the previous year of search data, the busiest month for potential traffic flows (for both directions on the route combined) is January 2017, with over 27,000 searches, over 10,000 higher than the lowest monthly figure, which was recorded in May 2016 (17,000 searches). The seasonality profile of this search data is slightly less extreme than the last Unserved Route of the Week (Manchester to Mumbai) with the low-month traffic representing 62% of the highest month. According to OAG Traffic Analyser, because there is no direct service, the top three connecting options chosen by those passengers who did book travel between Sydney and Osaka in the past year indicates that the majority of connecting travellers used Haneda (35%), Cairns (14.4%) and Tokyo Narita (14.2%). Looking at traffic flows in the opposite direction, Haneda still leads the way with an increased share (38%), but this time from Narita (14%) and Hong Kong (13%).

Indeed, an O&D that is not served by a non-stop flight will typically display a low purchase rate and low traffic. In this instance Skyscanner’s Travel Insight indicates a monthly average of 9.9% for the Sydney to Osaka route (see graph below). Therefore, if there was a Sydney to Osaka route, and if bookings performed in line with the “Skyscanner market average” for direct services at both airports (12.3%), the airline operating this route could immediately expect an improved purchase rate of 22%, without any increased marketing spend. However, with over 275,000 annual searches at least a five times weekly service should be immediately viable for the airline selecting to start this potential city pair. “When we apply our 39% market share to the Australia – Osaka market size, Sydney’s O&D passengers are estimated at over 106,000 per annum. That makes this route both Sydney and Osaka’s largest unserved route. Consequentially the two airports have been putting a lot of effort into securing an airline to operate it, particularly given the attractive long-haul yields,” concludes Perring. 

Source: Skyscanner.

About this anna.aero analysis and Skyscanner data

“Unserved Route of the Week” is a cooperation between anna.aero and the B2B branch of the Skyscanner.net consumer flight comparison site and is a new kind of analysis harnessing an entirely new resource: the amazing power of the aspirational data captured from Skyscanner.net flight comparison site which has +60 million unique visitors per month.

Skyscanner” packages this amazing B2C data into a suite of business products which offer comprehensive data solutions – our specific need to identify unserved routes uses the Skyscanner Travel Insight product, a comprehensive, unique ‘big data’ set that can accurately predict future demand by telling you where 60 million real living-and-breathing travellers actually want to fly to. (And bear in mind that there are other significant search volumes that could also be added to the Skyscanner totals – from dedicated airline websites, competitive search engines etc, underlining the value of Skyscanner data as a conservative indicator of market route demand.)

Check next week’s newsletter for another great anna.aero-Skyscanner “Unserved Route of the Week” – or browse in anna.aero’s Route Shop where there are 3,100 more unserved routes.

 

 


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