LIFE AFTER SQ006 - Orient Aviation

c o u n t r yf o c u sIn 1999, although leisure traffic increased,the critical business passenger sector declined.But from February 2000 executive travel beganto grow again, raising yields.“Our revenue from international passengersgrew approximately 8%. Traffic forthe domestic portion is stable and cargobusiness has been very good through 2000,”said Kaneko.“But recently the slowdown in theAmerican economy, which also influences theAsian economy, has caused a small decreasein cargo traffic between Japan and the U.S.and Asia and the U.S. I am a little concerned,but I am sure the U.S. economy will make asoft landing.“Of course the airline business can behit by cyclical economic conditions so maybefor one year we may have to face some difficulty.But as a trend for five, 10 or 20 yearswe can expect very healthy growth for airtraffic demand in passenger and cargo, bothinternational and domestic.“For 2001 we expect 2% growth indomestic passengers, 3% for internationaltravellers and 5% or 6% for internationalcargo. As an average, we can expect goodgrowth for two decades. So we have to beprepared for the short term depression ordifficulty, but look to long-term averagegrowth,” he said.Kaneko is confident JAL’s profit record isgoing to be far better in the next ten yearsthan it has been in the past ten. “Not very big,two digit growth, but average stable profitcan be achieved,” he said.JAL continues to play a “wait-and-see”game on the airline alliance front. “Up to nowwe have preferred to steer an independentcourse, making alliances with partner airlineson a bilateral basis where we can see benefitsfor both partners and customers. We talk tothe executives of oneworld member carriers,but we are not in a hurry to make a decision tojoin any particular alliance,” said Kaneko.“We have partnerships with carriersbelonging to other alliances like Air France, amember of Skyteam, and THAI and Air NewZealand in the Star Alliance. Last year, weforged a cargo partnership with NorthwestAirlines. There is no hurry, no pressure andwe continue to weigh the pros and cons ofjoining a global alliance.”Kaneko is well aware of the challengesahead, including airport issues, liberalisationand inevitably increasing competition. But allin all, he said, JAL is in a much stronger positionthan it was three years ago. “It’s beenvery tough, but I am happy with the waythings are turning out,”he said.Japan Air System: being wooed by the major manufacturersJAS eyes new jetsJapan’s third major domestic carrier, JapanAir System (JAS), is reviewing a fleetmodernisation plan that could see its ageingfleet of A300s replaced over the next fiveyears. Company sources confirm the carrieris in discussion with both Boeing and AirbusIndustrie over potential replacement jets.JAS, in which major flag carrier JapanAirlines (JAL) has an 8% stake, is, like its localrivals, also making money. Profits last yearmore than doubled to US$9.7 million from$4.6 million in 1999, with sales increasing 5.8%to $3.3 billion.With a fleet of 90 jets, more than a thirdunder lease, it has 36 A300s. They are primarilyused for domestic flights, although four A300-600s operate international services.Airbus is apparently proposing a newlighter version of its A330-500 aircraft, withBoeing pushing the B767-300ER.Airbus plans to develop a version of theA330-500 capable of flying as far as 7,000 nauticalmiles, aimed at European airlines flyingtrans-Atlantic routes or from Eastern Europeto Asia. The jet, which Airbus will build only ifdemand justifies commercial production, maynow have a version aimed at regional carriers,particularly in Asia.The modified plane, suitable for JASneeds, would have a range of about 4,350nautical miles, ideal for airlines seeking anaircraft for purely regional operations.JAS is mainly a domestic operator, but itdoes operate international services to Seouland Hong Kong, as well as Xian and Kunmingin mainland China.JAS and China Southern Airlines alsooperate code-share services between Osakaand Guangzhou, with each operator flyingthree times weekly.Other overseas destinations are servedthrough code-share arrangements, flights toAmsterdam with KLM on the Dutch operator’saircraft and to Seattle, San Francisco, LosAngeles and New York on Northwest Airlinesservices. Continental Airlines code-shares onthe same US-Japan flights.JAS has been looking to rationalise itsoperations through extensive code-sharingand joint ventures in Japan and elsewhere.It is a partner in the joint Tokyo-Osaka shuttleservice which also involves JAL and AllNippon Airways. From last September, JALand JAS combined selected airport servicesfor domestic and international flights. JALprovides baggage handling, cargo, ramp andairplane cleaning services for JAS flights atKansai International Airport.Both carriers also will combine check-inservices in the near future, with passengersable to check in from kiosks located at nearbytrain stations in Tokyo, Sapporo, Fukuoka andHakata, as well as at the Yokohama City AirTerminal.Other JAS cost reduction exercises includeoutsourcing. For example, it has signed a10-year $150 million agreement with Pratt &Whitney for a fleet management programmeof the JT8D-200 engines on its fleet of MD-80aircraft.36 | Orient Aviation | March 01