TokyoTomo Travel Guide

Kazuo Inamori, who on February 1 officially became Chairman of Japan Airlines, said in the news conference given on the same day that the airline aims for its rehabilitation without any loss of time while attaching overriding importance to the safety of its flight operations. When asked about the future of JAL and its management strategy including a choice of its foreign alliance partner, he said that he was not yet ready to give his definite comment on the issue since he just assumed his duties as the chairman. Although he is admittedly a layman for the airline industry, he expressed his confidence, from his long experience in managing companies, that the rehabilitation of Japan Airlines should be fully feasible if the turnaround plan is implemented without fail with the support of the Enterprise Turnaround Initiative Corp. of Japan (ETIC). Acknowledging that the airline is still hampered by a bureaucratic corporate culture, Masaru Onishi, JAL’s new President, pledged that the airline shall break with the past, eliminating drastically its high-cost organizational structures and other negative legacies, adding that it is the airline’s last chance to make a turnaround and, accordingly, each and every employee shall make a concerted effort to rebuild the company as a new airline.

According to President Onishi, JAL’s future strategy to be implemented includes “drastic renewal of aircraft fleet,” “strong, yet flexible business operation system” and “intensive investment of available resources,” which, he believes, will help JAL to re-merge as one of the world’s leading and powerful airlines. Also, Chairman Inamori said, “The most valuable asset for a company is its employees’ minds,” adding that Japan Airlines aims to reform the present organizational structures which are cynically criticized as being bureaucratic and at the same time to foster a corporate culture that encourages the employees to stay within the JAL Group and to be ready to join forces to realize the company’s rehabilitation. Chairman Inamori further mentioned, “A basic principle for any corporate management is to increase revenues and reduce costs.” “I therefore want to change the minds of its executives and the entire workforce to become conscious about accounting of profit and loss.”

Also, in response to the comment made by Transport Minister Seiji Maehara that the international flight operations can possibly be consolidated into one, Inamori, JAL’s new Chairman, argued that a Japan Airlines without international flights is unthinkable for many Japanese customers. Quoting his friend who emigrated to Brazil as saying “I feel like being back in my old country whenever I fly JAL. It’s my heart and soul and I hope that JAL will, by all means, maintain its international flights,” Inamori demonstrated his eagerness to rebuild the airline in such a way that it grows both in international and domestic flight operations. Commenting also on the relationship with its rival All Nippon Airways, he said that he should not hope only for JAL to enjoy prosperity, but hopes for a mutual growth through friendly competition with its rival ANA.

Meanwhile, shortly after JAL applied for bankruptcy protection under the Corporate Rehabilitation Law, there seemed to be some concerns about degrading of its brand image and possible troubles involving safety of the flight operations. However, as Inamori said, there was no confusion whatsoever and, in fact, Japan Airlines enjoyed its excellent passenger loads thanks to a heart-warming encouragements received from all concerned.

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.

Pursuant to Japan Airlines’ filing for corporate reorganization proceedings and the court decision on its commencement, Akira Kanai, chairman of Japan Association of Travel Agents (JATA), issued a statement on January 20 to express JATA’s hope for JAL’s sure and steady revival. In the statement, he remarked, “We highly appreciate JAL’s dedication up to now for the cause of regional developments and broad human exchange by way of tourism promotion at home and abroad. JAL’s early comeback is very much expected so that it could bring itself to resume such tasks. We will spare no effort in continuing to play our part as travel industry for the purpose of promoting human exchange.” Kosuke Shibata, president of JATA, also said at the regular press meeting on the same day, “Not a few travel agencies have immediately voiced ‘willingness to support JAL.’ It is our desire to go hand in hand with JAL for mutual prosperity.”

Takaya Okuyama, director and secretary general of JATA, said, “The revival plans released so far were generally more on the side of corporate restructuring by means of organizational trimming and downscaling of the flight network. What we want to see is the measures to improve profitability and to keep hold of the existing customers. We do not mean to back up JAL alone, but would like to cooperate with them in marketing superb products and services as before lest their failure should cause inconveniences on other airlines and travel industry.”

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Japan Airlines (JAL) will discontinue 10 international routes, cancelling 61 weekly return flights effective from its winter schedule during the fiscal year 2009. Eight routes are to be suspended and two routes will see a weekly frequency reduction. The airline will pull out all operations from Hangzhou, Qingdao, Xiamen in China and Mexico. Aircraft down-sizing will be planned also on the five routes. The route restructuring will bring a total of 13 suspensions and reductions including those already announced in the current fiscal year 2009. Consequently, during the winter schedule this year, the airline’s capacity offer, measured by available seat kilometers (ASK), will be reduced drastically by 19.2 percent compared to the same timetable period a year earlier.

JAL will also suspend eight domestic routes cancelling 13 return flights per day between the second half of FY2009 and the first half of FY2010. The airline’s current flight operations at Kobe Airport will be terminated. Including those routes already announced to be suspended, a total of 15 routes will be discontinued. Consequently, the airline’s ASK, available seat kilometers, will decrease by 3.3 percent during the second half of FY2009.

The suspensions and reductions of the routes including 10 international and eight domestic routes are expected to bring JAL a yearly improvement of 7.1 billion yen in terms of its revenue and expenditures. A total of 28 routes to be cut, including those already announced, will bring the airline a cost reduction of 12.2 billion yen. In terms of aircraft fleet, the company will have a surplus of 10 aircraft, some to be retired and the rest to be put into service for increased slots at Tokyo’s Haneda Airport. More than 200 employees are currently working at four overseas airports and one domestic airport, from which JAL is to terminate the entire flight operations. The arising personnel issue, after the route closure, will be dealt with in due course, the sources said.

Meanwhile, Japan Airlines has applied for assistance from the Enterprise Turnaround Initiative Corporation (ETIC). The ETIC will work on the rebuilding plan for the airline. Manabu Sato, the airline’s Executive Officer Deputy General Manager, Corporate Affairs mentioned that since the restructuring of the unprofitable routes was hurriedly carried out, JAL will have to further review the route restructuring. Business traffic has considerably dropped on these routes, thus lowering the profitability, which leads to the route suspensions and frequency reductions, Sato indicated, seeking the understanding of its customers.

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.