Qantas chief executive Alan Joyce has reaffirmed his confidence about the long-term investment in Jetstar Japan, despite signs that its growth plans are stalling.
Joyce told an Australian Senate committee hearing on 14 March that he believes that just as Jetstar in Australia has performed strongly, the Japanese venture is going to be “similarly successful for the Qantas group.”
“It is a business that a lot of companies, a lot of airlines, would love to get their hands on. We could easily sell it for what we have put into it, but that business in the future is going to be a big profit earner—like Jetstar was in Australia—and it will generate significant returns for the group,” he adds.
Qantas holds a 33% voting stake in Jetstar Japan, although its total economic interest in the carrier rose to 45.7% following a Y11 billion ($109 million) capital injection last year. Japan Airlines also holds the same size stake, while the other investors are Mitsubishi Corp and Century Tokyo Leasing.
Joyce’s comments come amid signs that the Narita-based carrier’s expansion plans have been curtailed amid challenging market conditions and a recent brush with regulators.
In October last year, Japan’s Civil Aviation Bureau reprimanded the airline for an oversight related to routine inspections on its A320s.
It is understood that may have delayed its plans to expand to a second base, which has reportedly left its fleet of 18 Airbus A320s heavily under-utilised. It has also emerged that Qantas recently leased one aircraft allocated to Jetstar Japan out to Spanish carrier Vueling Airlines.
Flightglobal’s Ascend Online Fleets database shows that the Japanese carrier is scheduled to take delivery of four more A320s this year. Qantas is listed as the owner of those aircraft.