As the global aviation industry continues to get crushed by diminished passenger numbers, ZIPAIR president Nishida Shingo said, "I’m pleased to have been able to kick off our service despite the tough situation due to the formidable challenge of the coronavirus pandemic."
ZIPAIR was established in 2018 as a subsidiary of Japan Airlines. It initially planned to start flights between Narita and Bangkok from May this year, adding Seoul from July. Longer-term, it aims to expand into medium and long-distance routes to North America.
The launch plans were scuttled by immigration restrictions that forced most people to cancel travel plans. When the company made an April announcement that passenger flights were postponed, about 220 employees, including pilots and flight attendants, were left in limbo along with two aircraft.
Riding out the storm with cargo service
ZIPAIR’s solution was to move into cargo service and take advantage of the fact that rates had doubled from the previous year due to flight cancellations. Nishida noted the growing demand that the airline was able to meet due to the type of aircraft it operates.
The ZIPAIR fleet comprises two medium-sized Boeing 787s with a long cruising range. Other Japanese budget airlines generally use smaller models with limited cargo space, but ZIPAIR’s jets have a spacious cargo hold that can accommodate larger containers. That gave the fledgling company a competitive edge.
As the pandemic took hold, ZIPAIR retained all employees as it worked towards the launch of passenger flights. About 110 flight attendants continued to train on board the cargo flights with no passengers. Some of the seats were taken up by stuffed teddy bears instead.
One month after its first two-person passenger flight, occupancy remains mostly in the single digits. ZIPAIR officials say that is sustainable alongside its cargo service as the business model adapts to changing times.
ZIPAIR hopes to cash in on new demand after the pandemic. Aviation industry experts predict that while the number of business travelers will not recover to pre-pandemic levels, budget tourism is set to rebound fast.
"In the fallout from the pandemic, the traffic of full-service airlines will shrink, particularly on international flights,” said Nishida. “That should further increase our opportunities to enter longer-distance services. We’ll assess which routes will be in high demand."
Just one week after its first passenger flight took off, ZIPAIR announced a plan to hire about 100 new flight attendants. The unusual move comes as other airlines force layoffs. ZIPAIR says the hires will be needed to meet its goals of becoming the first Japanese low-cost carrier to launch a North American route sometime next fiscal year.
One optimistic ZIPAIR official says, "Because we started from scratch, we have only minimum aircraft in the fleet, which gives us flexibility in route selection."
Some competition is ahead following an October 27 announcement from Japan Airlines’ rival All Nippon Airways that it is also planning a budget carrier for medium-range routes. The ANA subsidiary aims to service Southeast Asia and Australia by the end of March 2023.
ZIPAIR appears to be counting on the airline industry emerging from the toughest of times. Its upcoming Hawaii service is set to be something of a test as it is a route with relatively low demand for cargo. Passenger numbers will tell the story.