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Japan Airlines to learn from previous mistakes in LCC establishment; JAL to re-list by Mar-2013

23-Aug-2011 9:46 AM

Japan Airlines (JAL) president Masaru Onishi stated he believes the carrier’s JV with Jetstar Airways, Jetstar Japan, will be able to learn from and avoid mistakes made by other well-established US and European carriers in developing subsidiary LCCs (Today Online/Wall Street Journal, 22-Aug-2011). He added the Japanese government needs to make further progress to enhance the global competitiveness of its airports, as part of which it needs to implement reforms to regulations on landing fees and slots. Mr Onishi said JAL has sought advice from members of the oneworld alliance in its planned move into the LCC sector. JAL is on track to re-list its shares on the Tokyo Stock Exchange by the end of the fiscal year ended Mar-2013, Mr Onishi added. He also stated the carrier's profit structure is "improving", but its financial condition remains "weak".

Japan Airlines: "[The lessons from] history tell us the two key issues we need to focus on are contamination and cannibalisation. We want to respect the business model established by Jetstar and we don't want to push ourselves forward and destroy that model... Our profit structure is improving, but our financial condition remains weak. As we prepare for the [share] listing and a period of mega-competition ahead, I hope to make the company financially strong as early as possible... One of the key factors behind why we have been able to generate a certain degree of profit is due to the speediness in our efforts. We urge that the related parties also have a sense of speed. The first step is to ensure transparency in how the airport usage fees are being used," Masaru Onishi, President. Source: Today Online/Wall Street Journal, 22-Aug-2011.