At the end of this past August the battle for dominance of between Japan’s two dominant airlines had reached a peak. All Nippon Airways (ANA), the slightly smaller and financially stable airline had begun discussing the creation of a low cost carrier (LCC) … and Japan Airlines (JAL), the larger airline in the midst of financial ruins, announced they were also considering the creation of a low cost carrier. I had begun writing about the potential creation of these two low cost carriers here Japan : An Airline Battle Ground and here Can Japan Airlines’ Layoffs and Shedding of Routes & Planes Be Good?
As the reality of rebuilding Japan Airlines’ financial stability has settled in, Kazuo Inamori, Chairman of Japan Airlines, has taken a step back from the creation of a low cost carrier to compete with the one All Nippon Airways intends to create, based at Kansai International Airport. A few days ago, in address to Japan’s Foreign Correspondents Club, Mr. Inamori states that he’d like Japan Airlines to focus on providing a high quality of service, to recapture its dominance of the Japanese business travel markets.
With Japan Airlines focusing on service and rebuilding its primary core business, Mr. Inamori says his is cautious about the creation of a low cost carrier, and that Japan Airlines “should not worry about chasing after scale expansion.”
So for now, Japan Airlines is not out of the low cost carrier race, it is merely putting the brakes on to reevaluate its financial state and its long term sustainability … something the airline had failed to do time and time again over the past few years.