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Tuesday, January 12, 2010

New rumored details of JAL restructuring plan

Kyodo News reports about some new details about Japan Airlines' restructuring plan. Under the plan, JAL will start up a budget airlines operating flights from Kansai and Chubu airports and sell off shares of JTA and RAC.

ETIC's latest ideas to save JAL's money-losing routes is to set up a budget carrier. The new airlines will link Kansai (KIX) and Chubu (NGO), two international airports in Japan, with popular tourist destinations in Japan and overseas, e.g. Sapporo and Okinawa, taking over some routes currently flown by JAL Express. The operation will start by fiscal year 2012 through march 2013 and will offer low fares (that's why ANA's stock drops today :) But the down side is, this is a no-thrill budget carrier, so there will be less flight crew, no free drinks (yes will have to pay for your drinks!) and is economy class only on domestic flights (I thought domestic J class is really popular!?). If the new JAL low cost carrier really charges for all drinks and not just alcoholic beverages, this will be a step further than what most of current US airlines do (which is buy your own food and alcohol). I wonder if JAL will charge for the checked baggages like other US airlines if you fly on this budget airlines.

At the same time, JAL will suspend 14 international and 12 domestic routes. But the report does not mention which ones are in danger. To trim down the costs further, ETIC might relocate JAL's headquarters from Shinagawa to Haneda.

Other ideas are to sell off part of the shares of Japan Transocean Air (JTA) and Ryukyu Air Commuter (RAC) to local authorities. Both of them mainly serve remote islands in Japan. If this happens, JTA and RAC will no longer be JAL's consolidated subsidiaries.

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