Japan Airlines plans to concentrate on medium- and long-haul services in the coming years, leaving the short-haul market to low-cost carriers and other full service airlines in Northeast Asia.
While the Oneworld carrier does not plan to pull out of the domestic and regional international market, it is unlikely to invest any further in these two areas, says JAL chairman Masaru Onishi.
"What we would like to focus on are the mid- to long-haul routes. So if you convert it into regions, we are talking about Southeast Asia, North America and Europe. These are the areas that we believe that we should concentrate our resources on," he says in an interview with Flightglobal publication Airline Business.
Japan's depressed economy and its ageing population mean that JAL does not expect "much growth" in the domestic market, he adds. Within Northeast Asia, he expects LCCs and airlines from countries like China to meet demand.
"I expect the supply to be very strong with many LCCs and some of the Chinese airlines coming into this market. Some will continue to do business without much regard to making much profit. We have no intention of putting our resources into those areas. We would like to secure the market we have, and expand and develop the mid-to-long haul routes," says Onishi.
Japan's airline market has opened up in recent years with the liberalisation of departure and arrival slots at Tokyo's Haneda and Narita airports, and the government allowing LCCs to begin operations in the country. JAL itself got into the act with Jetstar Japan, a joint venture with Australia's Qantas.
These "drastic changes" have spurred new demand, says Onishi. JAL can take advantage by playing to its strength of being a network carrier in an important hub.
"The market has expanded and this has enabled customers to have more choice of products," says Onishi. "This is a business chance, something that can be advantageous to us. We should put emphasis on the areas where we are strong in so that we can appeal to our core customers."
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