Virgin to axe taxpayer-subsidised Tokyo flights due to weak demand from Japanese travellers

The airline will scrap a government-subsidised route to Tokyo, due to weak demand from Japanese travellers.

Australians’ enthusiasm for exploring Japan is not being reciprocated, prompting Virgin to announce the axing of its government subsidised Cairns-Tokyo service.

Launched last June using new Boeing 737 Max 8s, the 7.5 hour flight attracted disappointing loads, blamed on the weak recovery of the Japanese inbound travel market.

Virgin Australia said the flights would end in February 2025 and the 2000 people with bookings beyond that date would receive a refund.

Subsidised by the Queensland government in a three-year deal designed to support new international routes, it was unclear if Virgin Australia would have to repay any taxpayer funding.

Statistics compiled by the Bureau of Infrastructure, Transport and Regional Economics showed in April fewer than half of the 176 seats on Virgin flights were filled on outbound services to Tokyo, and 65 per cent on inbound.

Virgin Australia chief transformation and strategy officer Alistair Hartley apologised to impacted customers, saying the decision to withdraw from Cairns-Tokyo was “tough”.

“Unfortunately the recovery of inbound visitors from Japan is significantly below forecast and therefore operating our own service to Tokyo is no longer commercially viable,” said Mr Hartley.

“We know this is disappointing news, and we are sorry for the impact this decision will have on those guests booked to travel with us from February 24, 2025.”

He said Virgin Australia customers and Velocity members would still be able to book flights to Japan through the airline’s website with All Nippon Airways.

“We have a strong partnership with ANA which will allow us to continue to support inbound tourism from Japan to Australia and through to popular tourist destinations like Far North Queensland,” said Mr Hartley.

“Our international network continues to be a central part of our strategy.”

Virgin Australia cabin crew Tally Walling-Scott and Sharmey Sharman with the Melbourne Miaos dancers Minhan Huang and Hanyue Xue to celebrate the launch of Cairns-Tokyo flights. Picture: Brendan Radke

Tourism Minister Michael Healy said it was disappointing Virgin Australia had opted to end the flights from February ”reportedly due to poor inbound bookings”.

“This is a commercial decision by the airline,” said Mr Healy.

“Fortunately, we still have direct Jetstar flights between Cairns and Japan, and we see a trend of Japanese tourists flying into Brisbane and then travelling on to Cairns, Whitsundays and the Gold Coast.”

It was understood Virgin Australia would hand back its traffic rights to Japan to the International Air Services Commission, creating an opportunity for Qantas.

The rights cannot be handed to a foreign carrier such as ANA or Japan Airlines.

Tourism Australia managing director Phillipa Harrison said the Japanese market had been the slowest to return down under, outside of China, for several reasons.

She said one was the weaker yen and another was consumer confidence.

“The Japanese market has been very conservative in terms of travelling outbound again, and there was a lot of domestic programs during Covid to have people (in Japan) travel locally,” said Ms Harrison.

“However, our tour operators were telling me recently that (Japanese visitors) are starting to focus on Australia again and in the last couple of months we have seen an increase, but it’s been a slow burn.”

Brisbane Airport general manager of aviation Ryan Both said the Japanese market was vital for tourism and trade, with Japanese visitors now the fifth-largest group of overseas visitors coming through the gateway.

“In the 2024 financial year, 122,000 Japanese passport holders arrived at Brisbane Airport, representing 95 per cent of pre-Covid numbers,” said Mr Both.

“A year ago, airlines scheduled three flights a week each way between Japan and Brisbane — now there are 18 flights a week each with aircraft full.”