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Monday, February 13, 2012

[Update] Nikkei: JAL targets 25% boost in international seating capacity by FY2016

Nikkei reports that Japan Airlines (JAL) is working on its medium term business plan in preparation for its relisting on TSE later this year. They held a special shareholders meeting earlier and revealed what were on their minds. Part of the plan was to increase international capacity by 25% by fiscal year 2016. Below are the highlights of their plan:

  • 25% growth in international seating capacity by FY 2016
  • Open new routes to North American and European destinations to attract business travelers
  • Strengthen partnership with foreign airlines
  • Make use of the state-of-art 787 and reduce the use of large aircraft
  • Expect 2% decline in domestic passenger traffic
  • Target to maintain 100 billion yen operating profit per fiscal year even under severe business environment
  • Boost ratio of consolidated operating profit to revenue to 10% or more
  • Boost capital adequacy ratio to 50% or more
It is a bit ambitious to target 25% capacity growth especially after cutting ~30% of its routes just a while back. It will be interesting to see what new routes they have in mind when they are ready to announce it. 

jiji.com also mentions JAL is reviewing retirement plans of large-size aircraft Boeing 777-200. I am assuming they were referring to the 777-200ERs currently used on international flights not the 777-200s on domestic ones. It will be sad to see 777-200ERs to go but they aren't currently serving that many destinations. Some of them are even scheduled to be switched to 787-8 later. By retiring the larger 777s, JAL can make sure of its fuel-efficient mid and small sized aircraft to improve profitability. 

So what do you think of their rumored plan?

[UPDATE]
Nikkei has revealed more details of this medium term business plan which includes more plan orders and new routes. You can read more about this here.

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