Japan Airlines (JAL) and Japan Air System (JAS) are predicting savings of ´73 billion ($548 million) in the first full year of their planned merger. The enlarged carrier will operate as the Japan Airlines Group.
By October this year, the airlines will form a joint holding company known as Japan Airlines System. The two airlines' operations will be completely merged in the second quarter of 2004. International passenger services will operate as Japan Airlines International, while domestic passenger operations will assume the name Japan Airlines Domestic. Cargo operations will take on the name Japan Airlines Cargo.
In the 2005 fiscal year cost savings are expected to amount to ´73 billion - ´31 billion from facilities, ´24 billion from manpower, ´12 billion from aircraft and ´6 billion from other areas. Savings from unnecessary investment are also expected to amount to ´100 billion up to the 2005 fiscal year. In addition to just over 3,000 job cuts, the carriers plan to reduce their combined fleet by around ten aircraft.
Announcing the plan last year, JAL and JAS said they would create a carrier with a domestic market share of around 48%, compared with rival All Nippon Airways' domestic share of around 49%.
Source: Flight International
