JULY 2018 81
Jetstar Japan
Nick Rohrlach is chief executive
adviser and executive director
at Jetstar Japan.JETSTARpromise. Already attracting more than
20 million inbound foreign tourists
annually, the Japan National Tourism
Organization has an ambitious target
of lifting that to 40 million by 2020,
the year of the Tokyo Olympic Games.
After the Olympics, the
government’s aim is to attract 60
million visitors a year by 2030. It
may not be so ambitious. It recently
announced that the estimated number
of foreign visitors to Japan from
January to April this year topped 10
million, with growth at the fastest
pace on record. It is expected that
LCCs from China, South Korea,
Taiwan, Hong Kong and South East
Asia will be one of the key drivers of
this growth.
One of the reasons JAL may have
decided to get in on the long-haul
LCC budget game is that a growing
number of foreign players are entering
its market in that space. For example,
in June last year Malaysia’s AirAsia X
launched flights from Kuala Lumpur
through Osaka to Hawaii. Then,
in December, Singapore Airlines’
Scoot followed suit with flights
from Singapore to Osaka and on to
Honolulu.
For Rohrlach and the team at
Jetstar, the more foreign visitors
the better because it represents a
mouth-watering prospect. He has
a strong background in strategic
planning, starting his career in
Australia’s Department of Finance
and Administration, then spending
several years in The Boston Consulting
Group in Sydney and Dubai before
joining Qantas, where he became head
of strategy and planning.
It hasn’t all been plain sailing. He
was executive vice president of the
ill-fated Jetstar Hong Kong, which
ultimately failed to get an operating
licence. But he went on to take on
the job of Jetstar’s executive manager
of customer and strategy, in charge
of the overall customer experience
and business roadmaps of all Jetstar-
branded airlines across the group;
Jetstar Airways (Australia and New
Zealand), Jetstar Asia (Singapore),
Jetstar Japan and Jetstar Pacific
(Vietnam), before taking up the Tokyo
post in September last year.
He says things are going well at
Jetstar Japan.
“We are still Japan’s number one
LCC and have just taken delivery
of our 22nd (Airbus A320) aircraft.
We’ve had two years of profits
now and have confirmed a couple
of months ago that our first half(the financial year is the same as
Australia’s) was a record profit so
hopefully we will be able to announce
something similar for the full year in
a few months time as well. Overall for
us we see great growth in the business
and great profits as we are coming up
to our sixth anniversary. It’s pretty
positive all round.”
That may be so but Jetstar does
have challenges ahead, although it
has put some behind it. Qantas and
JAL initially each held a 33.3 per
cent stake, with the remainder in
the hands of Mitsubishi Corporation
(16.7 per cent) and Century Tokyo
Leasing Corporation (16.7 per cent).
In November 2013, Qantas and
JAL each injected A$66 million of
fresh capital, with both lifting their
shares to 45.7 per cent. Then, in
November 2014, the two agreed to
inject a further A$66 million. These
fresh injections were required to keep
the carrier going but their confidence
in the future has certainly paid off.
There are a number of budget
operators in Japan but the market
is dominated by Jetstar and LCCs of
the rival All Nippon Airways (ANA)
group, Peach and Vanilla. ANA
announced recently that in 2020 it
will merge Vanilla, which it wholly
owns, with Peach, after increasing
its stake in Peach from 67 per cent
to 77.9 per cent at a cost of up to
$107 million. The new entity will be
called Peach. Will that knock Jetstar
off its market-leading domestic
perch?
“No,” says Rohrlach. “The first thing
is we have a 50 per cent marketshare,
so even when Peach and Vanilla merge
we will still be bigger than the new
Peach domestically. We will make
sure we try to protect our number one
domestic position. Obviously, they
have a lot more international routes so
we are actually behind both of them
anyway in that sector so that will just
take them further ahead of us from an
international marketshare perspective.
But we feel comfortable with that.
“Obviously, I’d prefer them not to
merge but I don’t get a say in it. Our
main response will be to do what
has worked for us, which is again
a primary focus on domestic and
I’m quite confident we will hold our
position by doing what we’ve done
so far, which is growing our existing
routes and ensuring we have the best
network and frequencies but then also
looking for those new opportunities
to secondary cities. Over the next
few years we will be looking to add‘We’ve got
the same
product but
we’ve got
different
strategies.’
NICK ROHRLACH