Could the delay in Qantas's Narita → Haneda switch be because they're planning to deploy the A380?

Australia and Japan have an open skies agreement that allows for unlimited capacity between the countries. This has enabled a rapid growth in capacity between the countries in recent years. We’ve previously highlighted this, particularly the phenomenal growth in outbound travel from Australia to Japan.

Chart of the Week #3: Where are Australians traveling?

Most of this capacity has been pushed through Tokyo’s Narita airport as Haneda is constrained by a very limited number of slots being available for international flights and carriers. Unusually, these are allocated to countries on a bilateral reciprocal basis, allowing the countries to allocate them to their airlines as they see fit.

Australia was awarded one slot pair in 2014 that was subsequently allocated to Qantas by the IASC. In 2019, Australia was awarded another two slot pairs that were allocated to Qantas and Virgin. Virgin has since withdrawn from the market and returned their allocation that was then reallocated to Qantas in September 2024.

Qantas were meant to begin utilising their 3rd daily frequency from the end of March, however the IASC has since granted them an extension until the end of November. Concerningly, the IASC kinda hid this on their website. It isn’t listed on their "Latest Updates" and not part of the usual email distribution, but that’s another matter.

The background

Qantas currently fly 4x daily flights to Tokyo: 2x daily Sydney-Haneda, 1x daily Melbourne-Narita, and 1x daily Brisbane-Narita. All are operated by the A330-300 with occasional A330-200 substitutions. That amounts to 1188 daily seats in each direction, but only 112 business class seats.

A few years back they operated the B787-9 on Sydney-Haneda to increase the premium seat count. Comparatively, the B787 has 42 business class, 28 premium economy seats, and 166 economy seats. That’s a big difference in the potential yield mix but the B787s were needed on longer sectors to Europe and United States.

When Qantas were offered 3rd Haneda slot pair it created a conundrum. The simple option was to move either Melbourne or Brisbane's Narita route to Haneda, but this would orphan one of them at Narita. Instead, Qantas told the IASC that they would fly 1x daily each from Brisbane, Melbourne and Sydney, thereby reducing Sydney-Haneda from 2x to 1x daily. Unless they replace the 2nd Sydney-Haneda flights with a new Sydney-Narita flight it’ll result in a significant capacity reduction of 297 seats per day each way or 33%.

One challenge with Haneda slots is that they’re fixed to specific time periods. Two slot pairs are for daytime use between 6am and 10pm, and one slot pair for nighttime use between 10pm and 6am. Qantas can attempt to adjust the timings within these parameters subject to availability, but daytime and nighttimes slots can’t be switched.

The hunch …

Mea culpa: we were pretty sure that Qantas would add Sydney-Narita and maintain the 4x daily Tokyo service!

But now we have a hunch: they won’t add Sydney-Narita and instead make up the capacity by switching the A330-300 on the Sydney-Haneda flight with an A380. Not only will this maintain capacity, it’ll add a lot of premium seats that Qantas would prefer. Why did we change out mind?

We'd previously discounted the possibility of Qantas scheduling the A380 to Haneda as the aircraft has significant restrictions on its at Haneda airport. Firstly, it can only be operated to/from Haneda between 11pm and 6am. And even then, only one can be on the ground at any given time as there is only one code F gate and limited code F long term parking.

There is a common misconception that Haneda doesn’t allow the A380. This is probably because no other airlines fly it there at present but this seems to be an urban legend. Haneda’s NS25 capacity declaration clearly indicates the limitations pertaining to the A380. In case people don’t believe us, we’ve kept the receipts.

But it’s still easier said than done. Let’s consider the challenges in more detail:

1. The A380 would need to spend nearly 18 hours on ground, arriving at 5:20am (QF25) & departing at 11pm (QF26). The A380 couldn't use Qantas's other arrival and departure slots as they’re all daytime and can’t be easily shifted to between 11pm and 7am. In fact, the current QF26 departure slot would need to be moved from 10pm to 11pm.

2. This destroys the A380s's utilisation on the route. It will require 2 aircraft to operate daily service rather than 1! But it's not just A380 utilisation that would be hurt as the slot idiosyncrasies will mean one of the A330s will also overnight at Haneda!

   1. Under the proposed schedule, only three A330s are needed to operate the three daily flights (or four for four). Brisbane-Haneda (QF61) does quick turnaround as Haneda-Melbourne (QF80); Melbourne-Haneda (QF79) does a quick turn as Haneda-Sydney (QF26); and Sydney-Haneda (QF25) does a quick turn to Haneda-Brisbane (QF62). These are all less than two hours.

   2. But with the A380 taking over the Sydney flights, Brisbane-Haneda (QF61) will do quick turnaround as Haneda-Melbourne (QF80) (less than 2h), but Melbourne-Haneda (QF79) must overnight before coming back as Haneda-Brisbane (QF62).

So where the current schedule requires 4x A330 for 4x daily flights. Working the A380 into schedule requires 5x aircraft (2x A380, 3x A330) only operating 3x daily flights, offering similar capacity but more premium capacity! How much more?

Total seats will decline from 1188 to 1079 per day each way, however instead of just 112 business class seats, they’ll now be able to offer 14 first, 126 business and 60 premium economy seats. Economy class seats will decline from 1076 to 879 per day each way.

So why did we change our mind?

We’d previously discounted the possibility of the A380 thinking that other operators (e.g. Emirates) would beat them to it, thereby block Qantas given the limitations on the A380’s use. They haven’t, leaving the door open.

Secondly, we’d normally considered that undermining aircraft utilisation would’ve been a cost too far. However, given broader capacity considerations it’s unlikely that Qantas are desperate to deploy further returning A380 capacity to the United States. Furthermore, as the A380s are now fully depreciated, the opportunity cost of low utilisation is relatively lower.

Reducing A330 utilisation is more complicated as the aircraft are the workhorse of the Asian network. However, while this plan reduces A330 utilisation it does so by opening up an aircraft as it only uses 3 aircraft instead of 4! Given the acute A330 fleet shortage and upcoming refurbishments scheduled for the A330-200s this presents a net gain at the cost of lower utilisation! It's an unusual trade-off!

And finally, November! The IASC extension noted they'll begin by 30 November. This date wasn’t decided by the IASC but requested by Qantas. That's an odd date as NW25/26 starts on 26 October! Could it just be latitude for Qantas to do some slot swaps?

This’s possible, but it also just so happens to coincide with further A380 returns! At present, Qantas have 7x active A380s with 3x undergoing heavy maintenance and/or refurbishments. Per previous Qantas announcements, the A380 fleet is expected to be back to 10 by end of year.

They've already scheduled the A380 on Sydney-Dallas (4x weekly from August), accounting for the 8th A380, leaving the door open for the 9th & 10th to be deployed to Haneda!

Isn’t this all just speculation?

Yes, we know it's speculative and the evidence is circumstantial, but there's doesn't seem to be another reason they'd be delaying for an entire season. We’re all ears for why they’d be delaying …

Qantas have previously indicated they’d like to operate the A380 on the route, but the then CEO Alan Joyce highlighted the challenges. We'll happily eat our words but timing seems about right for the 9th & 10th A380s! The opportunity cost of the lower A380 utilisation is now smaller than it was when Qantas considered this in 2019 while yield benefit would be big!