JAL to Expand International Flight Services in FY 2007
By Kyodo News International, Tokyo
Jan. 17–TOKYO — Japan Airlines Corp. will expand busy international operations in fiscal 2007 in a bold review of its domestic and overseas services, hoping to improve its annual earnings by 7 billion yen, JAL President Haruka Nishimatsu said Wednesday.
“We will switch to the offensive in fiscal 2007″ through a business priority shift toward high-profit operations and away from low-profit or unprofitable routes, Nishimatsu said at a press conference.
Specifically, Japan’s No. 1 airline plans to increase flights on eight routes that use Narita Airport and Kansai International Airport to attract business passengers.
The number of weekly Narita-Moscow flights will increase to three from two at present, and those from Kansai to Dalian, China, will rise to seven from three, Nishimatsu said.
But JAL will either stop flying or cut the number of flights on three routes including Narita-Zurich.
In a step to improve its earnings, JAL also plans to introduce “premium economy” seats mainly on U.S. and European flights which are more comfortable and more expensive than regular economy class seats.
The carrier will also introduce new smaller aircraft for flights to China and Vietnam from Kansai to enhance operational efficiency.
Starting in fiscal 2007 that begins April 1, JAL will also restructure domestic operations, Nishimatsu said.
JAL will install 14 first class seats for an additional fare of around 10,000 yen on flights between Haneda airport in Tokyo and other airports in major cities such as Itami, Sapporo and Fukuoka, effective Dec. 1.
The addition of first class seats will offer “unprecedented high-quality services” on domestic flights, Nishimatsu said.
The premium economy seats on international flights and the first class seats on domestic flights are expected to bring in an additional annual revenue of 8 billion yen.
But JAL plans to stop operating around 10 low-margin domestic routes, Nishimatsu said, adding that the company will be able to “live up to local expectations in the future” by rehabilitating its management.
JAL has been restructuring its ailing business that culminated in a group net loss of 47.2 billion yen in fiscal 2005.
On Feb. 6, the company will release a medium-term management plan which will include cost-cutting and other restructuring measures.
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