After a series of safety lapses that forced the company's former chairman and CEO to resign last spring, Japan Airlines has announced changes that will help it improve aircraft reliability, cut costs, increase efficiency and cater more effectively to its customers by joining the Oneworld airline alliance last fall.
Although a bit late to enter the alliance arena
(BTN, Oct. 31, 2005), JAL never has ruled out the possibility of joining one, according to spokesperson Geoffrey Tudor. "Although we have up to now concluded bilateral alliances with individual partners, we have always kept an eye on the activities of multilateral alliances," he said. "We observed that the big alliances had steadily developed products and services to the mutual benefit of their members and decided that we would be able to develop further in the future as an alliance member. Even so, we plan to maintain our bilateral alliances, and Oneworld has no objection."
Why Oneworld over others? "We were already close to several Oneworld members through bilateral alliances (American Airlines, British Airways, Qantas, Cathay Pacific, Iberia and Lan Chile). We also feel that Oneworld provides the same high standards of products and service that we do," he added. In addition, JAL will further expand its network by being part of Oneworld, which links about 600 cities in 135 countries. Another attraction is the fact that Oneworld is the first multilateral alliance with interline e-ticketing in place between all of its partners, making it more convenient for passengers to transfer between flights of different member airlines.
To deal with safety issues, the airline will invest about ¥60 billion (US$520 million) in safety systems and measures between 2006 and 2011. As part of these efforts, JAL has become the first customer for Aircraft Health Management, a Boeing in-flight system that will help the carrier operate its aircraft at peak levels of safety, reliability and efficiency. This new data-monitoring and prognostic service monitors the health of an airplane in flight and relays that information in real time from the air to the ground. When the airplane arrives at the gate, maintenance crews are ready to make any needed repairs immediately.
To further increase efficiency and save costs, Japan Airlines is revamping its fleet, with plans to retire its older 747-200s and -300s and introduce 23 new aircraft between now and March 2009. These include four Boeing 787s and 19 Boeing 737-800s.
"We are renewing our fleet with the latest high-technology aircraft and are downsizing our fleet, adding more medium and small aircraft. These Boeing aircraft meet our needs in both size and technology," according to Tudor. "Eventually, we will have two types of 787, one for domestic routes and a longer-range version for international routes. The 737-800s will mainly be used on domestic routes. In 2009, we should have the following types of aircraft: 747-400, 777, 767, 787, 737-400, 737-800, A300-600 and the MD-90 series."
The completion of the carrier's current fleet modernization is timed to coincide with the expansion of Haneda Airport. "Haneda will have a new fourth runway that will increase the airport's capacity by 40 percent. This extra capacity will allow more domestic expansion and also provide enough flights for scheduled international services," said Tudor. "This is a major business chance for JAL as we will be able to expand domestic routes—by offering greater frequency on some routes, for example. We will also be able to launch scheduled international flights after 2009 from Haneda."
"The resulting increase in the number of takeoff and landing slots will lead to a major expansion in the airport's international services. The current total is 285,000 movements (flights per year). The proposed increase will be up to 407,000 movements, or an increase of 40 percent, or 122,000 movements, of which 30,000 (nearly 25 percent) will be international flights. We have no details yet but are thinking of using Haneda for building our network of routes to North and Southeast Asia and, in particular, China," JAL's Tudor said.
While Haneda will definitely offer more opportunities to JAL—as well as All Nippon Airways, new Japanese entrants into the market and foreign carriers—Narita also may offer new prospects for expansion, but that still is unclear. The second runway, which opened in 2002, has yet to be completed, since the farmer who owns the land that would make that possible refuses to sell, prolonging a controversy that surrounded the airport since long before it opened.
"The outcome at Narita depends on whether the airport authority can finish the second runway," Tudor said. "The present second runway is only 2,150 meters long and cannot be used for some large aircraft movements. On the assumption that the runway is extended to 2500 meters by 2009-10, that should provide more opportunities for expansion on international routes and for more domestic feed to Narita. At this stage, we have no details."
In the meantime, Japan Airlines is making route and service adjustments. The carrier is restructuring its international network to restore profitability and is in the process of cutting unprofitable routes from its network. "This is a difficult process in Japan and needs a careful approach to avoid upsetting local communities and politicians," said Tudor. JAL cut some international flights from Fukuoka last October and also cut flights to Saipan. More cuts are planned for this year. "I expect we will be making some announcements in February. These announcements will also include some route expansions," Tudor added.