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Saturday, October 17, 2009

Rumor: JAL to sell off planes and subsidiaries

The Japan Airlines restructuring rumors just won't end. It looks like to me people close to the source just throw out these ideas and test what the public reactions are. Then they will decide on what to do LOL. Mainichi Daily News reports the panel will suggest JAL to sell off a dozen of its large-sized planes and 30% of its subsidiaries.

The idea is after selling off its large-sized planes, JAL will have less empty seats to fill and therefore requires less marketing staff needed (i.e. less labor cost). Also the operating costs will be lower if JAL is to operate a smaller plane.

This is nothing new here. JAL is already in progress of reducing its large-sized fleet and replaced it with fuel efficient planes and mid to small sized ones. In fact JAL started phasing out its 744 passenger fleet THIS YEAR. Looks like the panel wants JAL to do it much sooner. As of March 31 2009, JAL has 37 744's and 10 777-300ER's in it passenger fleet. That's a lot of large-sized planes for this economy.

I am not against to sell off the 744 (not the 773 please LOL) but the problem is can they find a better who is willing to pay a good price for them nowadays? CX planned to sell off 5 of its 777-200's but they couldn't sell them at a good price and end up killing the plan. I don't think a lot of airlines will need a 744 nowadays when they all have trouble filling the seats.

JAL indeed has a lot of subsidiaries. But what's the deal with the rumors these days. A day ago the rumor suggested JAL will hold off selling 3 of its subsidiaries and today it says JAL will sell 30% of them!?!? I don't know who to believe anymore.

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