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Tuesday, August 18, 2009

JAL restructuring panel, you need to think more than just cost reductions!

The Japan Airlines restructuring panel will have its first meeting on August 20. This is a panel set up by Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT) aims at helping JAL to turn around. The panel consists of legal and academic experts, and the Japanese lenders of JAL will act as observers. Hopefully they will come up with something good out of the meeting.

But quite frankly, cost-saving isn't the ONLY thing JAL has to do. It has to remain competitive at the same time. Last time I checked with my travel agent, ANA is still offering a FREE stopover in Japan when you fly to Asia from the US, and I can accumulate 70% of the sector miles. On the other hand, not only JAL's ticket is more expensive, the Japan stopover costs $100 (plus tax) AND I can only accumulate 50% of the sector miles. Oh did I mention I can preselect my seats and reserve the exit row WITHOUT status on ANA. You can't even pre-select your seats on JAL's ticket until you do the online check-in 72 hours. Who would fly on JAL while ANA offer more or less the same level of service at a lower price!?!?

I hope the panel realize cost is not the only problem JAL is facing. Let's see if they can come up with some bold move, say continue to charge ZERO fuel surcharge while ANA has to reintroduce them. Or sell part of the business class cabin as economy and call it Economic business (this is just like premium economy but better LOL). Since they are doing this when the load is low in business class, why not charge for it!?

Well those are just my 2 cents. Hopefully the experts will come up with something good.

Source: Bloomberg


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