Andrzej Jeziorski/SINGAPORE

Japan Airlines (JAL) is expanding its international services and delegating more regional routes to its low cost subsidiaries as it braces itself against increased competition at home and abroad.

The carrier says the major catalysts for intensified competition are the emergence of new domestic Japanese carriers and consequent fare wars, the planned opening in 2000 of a new runway at Tokyo's crowded Narita Airport and the impact of airline alliances. The airline, which is heading for a return to profit of about ´10 billion ($84.7 million) in fiscal year 1998-9, predicts that it will then be able to pay its first shareholder dividends in six years, although the various factors make it "-difficult to draw a clear picture of the future".

JAL will retire four Boeing 747 Classics and one McDonnell Douglas DC-10-40 this year, and take delivery of nine new aircraft, including four 747-400s, two 777-300s, one 767-300, and two 737-400s. In its network plan for the fiscal year beginning on 1 April, it says that it is expanding its international services based on "-closer co-operation with overseas airlines and the development of opportunities provided by the revised US/Japan aviation agreement".

International partnerships will develop with the introduction of codesharing with oneworld alliance members American Airlines (from May), and British Airways and Cathay Pacific Airways (from the third quarter). Despite this major oneworld tie-up, the Japanese airline remains cautious about becoming a full member of this grouping.

"The main thrust of international network development in 1999 is on transpacific routes," says JAL. Flights are being introduced from Osaka to Chicago and Tokyo to Dallas/Fort Worth, while Tokyo-Las Vegas services will expand.

The airline's codeshare with Varig is being dropped because of exclusivity clauses in the Brazilian airline's Star Alliance membership. Most of JAL's Brazilian services will be rerouted via New York from November, replacing codeshare routes via Los Angeles.

"New York is a much better market for fifth-freedom traffic than Los Angeles," says the airline, adding that rerouting has only been allowed since the US-Japanese bilateral was revised. Codesharing with Air France on flights between Nagoya and Paris is also being stopped. The French carrier has ceased to operate this route.

Domestic services are being optimised for profitability, with increased numbers of services handed over to JAL subsidiaries JAL Express, which will take on six additional regional routes from its Osaka-Itami base and Okinawa-based Japan Transocean Air, which will introduce five wet lease routes this year. It will also increase flights from Nagoya to Fukuoka and Kagoshima, and extend the seasonal Fukushima-Sapporo service to cover the whole year.

Source: Flight International