• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Japan Airlines President Says International Routes Under Review to Cut Costs

Posted on: Sunday, 17 July 2005, 21:00 CDT

Jul. 16--TOKYO -- Japan Airlines Corp. will accelerate a drastic review of its international flight operations to cut costs on the back of higher crude oil prices, President Toshiyuki Shimmachi said Friday.

"We will accelerate a review of routes with low profitability and leave no stone unturned," Shimmachi said in an interview with Kyodo News.

"Flights to resorts, such as Saipan, are on the table for review," he said, noting the review of JAL's international route plan after October is focused on flights to resorts which are suffering from a fall in revenue per customer.

Under the review, to be concluded by the end of this month, the airline will consider whether to end flights with low profitability or shift to charter services, he suggested.

JAL has a high ratio of international flights and thus the airline is said to be vulnerable to international conditions, such as a rise in crude oil prices and terrorism.

The president expressed major concern over higher crude oil prices, saying that the airline faces an increase in costs more than 40 billion yen if oil prices remain at the current level.

"We integrated with Japan Air System Co. partly with the aim of making ourselves invulnerable to external factors, but many changes have occurred that have countered the effects of integration," he said.

JAL and JAS fully integrated their operations in April last year.

As to a series of safety blunders at the airline revealed recently, Shimmachi said, "There was distance between staff and management in the process of management integration, and communications among the divisions was insufficient." The president admitted that the blunders have started affecting the company's business, but was confident that their impact could be overcome by thoroughly implementing measures to raise safety awareness among employees.

The president said "safety-related issues are exempt from cost-cutting." This summer marks the 20th anniversary of the JAL jumbo jet crash on Mt. Osutaka in Gunma Prefecture. The crash killed over 500 people, making it the worst single-aircraft accident in aviation history.

Shimmachi said, "Mt. Osutaka is the starting point for safety." He said the crash is a lesson that should not be forgotten.

-----

To see more of Kyodo News International, go to http://www.kyodonews.com

Copyright (c) 2005, Kyodo News International, Tokyo

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

JASJF, JALSY, 9205,

Source: Kyodo News International, Tokyo

More News in this Category