Japan Airlines dismisses budget airlines threat

Japan Airlines said Tuesday the country's booming budget carrier market would not pose a "tremendous" threat to the flag carrier, which went bust in one of the nation's biggest-ever bankruptcies.

JAL, which went bankrupt in January 2010 with debts totalling 2.32 trillion yen ($29 billion), exited bankruptcy protection last year and has logged an annual net profit of about $2.3 billion in the fiscal year to March 2012.

Its president Yoshiharu Ueki said its revitalisation plan was not threatened by the flourishing low-cost carrier (LCC) scene in Japan, where a third budget airline is due to start flying next month.

"We don't expect a tremendous impact from the emergence of these LCC," Ueki told reporters in hong Kong, adding that budget airlines had yet to make a "very large" impact on JAL'S revenue.

"The LCC represents a new mode of transportation and as a result they have created a new demand -- demand (that did) not exist in the past and demand that we had not expected.

"We are not taking a complacent attitude and we are watching the movement of the LCC market carefully," said Ueki, a former pilot and the son of Japan's traditional kabuki drama actor Kataoka Chiezo.

Japan's major airlines were behind global players in terms of entry into the low-cost sector, but JAL's main rival All Nippon Airways (ANA) last year set up budget airline Peach Aviation with a Hong Kong investment fund.

It was followed by JAL's tie-up with Australia's Qantas which launched Jetstar Japan earlier this month, while AirAsia Japan -- a joint venture between ANA and Malaysia's AirAsia -- will start flying next month.

The launch of these budget airlines was part of a bid to open up a market that has traditionally suffered from high prices because of the dominance of JAL and ANA, Japan's two major carriers.

Japanese media have reported that JAL, which was de-listed due to the bankruptcy, has formally applied to re-list its shares on Tokyo's main bourse by September. Ueki declined to comment on the progress of the plan Tuesday.

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • What can void a new car warranty? James Deakin - Wheel Power
    What can void a new car warranty?

    "I was denied warranty once for changing my horn!" One very annoyed reader wrote. "I was told that placing a backup camera will void my warranty" said another. The others are best left in my private inbox as Yahoo! have a swear jar in the office that I do not feel like donating this week's pay to. Continue reading → …

  • Docu exposes destruction of PH marine resources VERA Files - The Inbox
    Docu exposes destruction of PH marine resources

    By Kiersnerr Gerwin Tacadena, VERA Files "Gutom (hunger)," Sen. Loren Legarda said is what’s in store for the Filipino people if destruction of the country's marine resources is not stopped. Legarda, chair of the Senate committee on Environment and Natural … Continue reading → …

  • ‘Yolanda’ fiberglass boats modern-day Noah’s ark VERA Files - The Inbox
    ‘Yolanda’ fiberglass boats modern-day Noah’s ark

    By Jane Dasal, VERA Files If you want to save the earth, build a boat. That's what a group of environmentalists is saying, especially if you want to save both the forests and fishermen affected by supertyphoon “Yolanda” (Haiyan). “Haiyan … Continue reading → …

Poll Choice Options