Japan Airlines is facing up to the fact that rival All Nippon Airways has become a formidable competitor and is coming up with strategies that will allow it to grow despite the new operating environment.
While JAL has had to shrink its network and retire older aircraft since 2010 when it filed for bankruptcy protection, ANA has taken advantage of its rival's troubles to grow in both the domestic and international markets.
"Our strategy is not to grow the size of the business but to improve profitability. We are not too ambitious. We do not care about what goes on at ANA but are focused on what we are doing," says JAL president Yoshiharu Ueki.
After its bankruptcy, JAL received a bail-out from the government through the Enterprise Turnaround Initiative Corp (ETIC). This has led to regular complaints from ANA that while JAL had received unfair aid from the government, ANA had to stand on its own two feet.
Ueki, however, counters that the ETIC invested around Y350 billion ($4.46 billion) but received around Y650 billion in return after selling its entire 96.5% stake in JAL through the airline's initial public offering. That represents a very good return for the government after just two years, he adds.
The market, he adds, is big enough for both JAL and ANA.
"JAL and ANA are the strongest airlines in Japan. But that does not mean that we have to fight for the same pie. There is enough for both of us to share," he adds.