Newsstand - JAL mulls over dropping flights to Saipan & Guam

http://www.saipantribune.com/newsstory.aspx?cat=1&newsID=47449


The Marianas Visitors Authority is determined to pull a few strings to keep
Japan Airlines flying to Saipan.

http://www.saipantribune.com/newsstory.aspx?cat=1&newsID=47480

Other airlines urged to fill in gap for JAL

This is the original article from Monday, 23 May 2005 Saipan Tribune. It announces that JL is considering withdrawing from the Japan to Guam/ Saipan market effective in October 2005, and should make a decision by July. The reason cited is high operational costs.

http://www.saipantribune.com/archives/newsstoryarch.aspx?cat=1&newsID=47417&archdte=5-23-2005

Here are the "archived" versions of posts number one and two above.

http://www.saipantribune.com/archives/newsstoryarch.aspx?cat=1&newsID=47449&archdte=5-24-2005

http://www.saipantribune.com/archives/newsstoryarch.aspx?cat=1&newsID=47480&archdte=5-25-2005

The Post #2 story in today's article includes this nugget.
A report by Wing Travel, a tourist publication, corroborated earlier reports regarding JAL's plan to suspend its entire services (sic) to Saipan in October.

According to Wing Travel, JAL has also decided to suspend three routes from Honolulu, and a service on (sic) Nagoya-Guam. Further, the airline was reported as planning to significantly cut the operation of leisure routes and international routes from Fukuoka.

Other destinations expected to be affected by JAL's decision are Hong Kong, Seoul, and Denpasar.

"JAL Group will sell airplanes without allocating them to other routes for those that have become a surplus after the suspension of services. Thus, the capacity on international routes provided by JAL Group will be reduced, affecting heavily the entire overseas travel market," a portion of the report read.

I have opened a separate thread on the related, big-picture issue.

JL to Cut International, FUK Service (JL forum)
http://www.flyertalk.com/forum/showthread.php?t=436332

This is from the Marianas Variety (Wed. 25 May 05):

CPA to lose $2.1M once JAL suspends flights

By Jude O. Marfil
Variety News Staff

THE Commonwealth Ports Authority expects to lose $2.1 million in income once Japan Airlines suspends its flights to Saipan this October and end its 28 years of operations in the Northern Marianas.

Carlos H. Salas, CPA executive director, said JAL’s withdrawal will negatively affect the financial condition of the authority, which has issued millions of dollars in bonds.

“JAL carries an average of 14,000 passengers per month or 173,000 per year.

It pays an average of $2.1 million in combined airport fees including landing fee and passenger fees,” said Salas.

Japanese visitors comprise 71 percent of the CNMI’s tourism market.

JAL’s clients account for 28 percent of the 50,000 total passengers that arrived at the Francisco C. Ada/Saipan International Airport in April.

Following an overhaul of its top management in March this year, JAL announced its “contingency measures to increase revenue” by $439 million.

One of the measures aims to concentrate on high profit and high growth routes and suspend routes that post low profits.

Salas said they were aware of JAL’s plan but did not expect Saipan to be adversely affected given the airline’s “stable” traffic here.

“JAL enjoys an average load factor of 85 to 86 percent,” said Salas. “But they told us that they are not making money because the fares are very low.”

JAL charges $647 for a two-way ticket to Saipan.

For its Narita-Saipan flights, JAL’s load factor ranges from 69 to 86 percent; Nagoya, 66 to 93 percent; and Osaka, 78 to 94 percent.

During Japan’s “Golden Week” earlier this month, passengers from Tokyo and Osaka who traveled to the CNMI reached 15,000.

“JAL told me they cannot raise rates lest they lose their customers,” said Salas.

Despite the report of JAL’s impending pullout, its employees here on Saipan are carrying on with their daily operation.

“We don’t have any restrictions. We are still issuing tickets and accepting bookings,” said a JAL ticketing staffer, who requested anonymity.

According to another JAL employee, the management informed them of the planned suspension of flights on Wednesday night.

“It’s really a sad thing. We’re keeping our fingers crossed.”

JAL employs 10 locals and nine Japanese for its branch here.

Marianas Visitors Authority, meanwhile, has begun requesting other airlines to beef up flights for the Japan-Saipan routes.

“(Japan’s pullout) was a shocking news. But we are looking for the best solutions by encouraging other airlines to increase their flights here,” MVA Managing Director Vicky I. Benavente said.

“We don’t want to alienate JAL but we also don’t want to sit back. We need to take proactive steps,” she added.

MVA is arranging for Gov. Juan N. Babauta to meet with JAL group president Toshiyuki Shinmachi as well as conduct a press conference in Tokyo.

I admit I haven't read all of the article links, but with the massive amount of Japanese the go to Guam and Saipan it seems odd to drop that service. I was in Guam working last June and when I went to the tourist areas it seemed difficult to find English speakers. Maybe they're trying to get that $2.1 million reduced

Low fares to the Marianas, due to heavy competition, and high operational costs. Refueling in Micronesia is expensive.

http://www.abc.net.au/ra/news/stories/s1381489.htm

The Governor of the Northern Marianas is in Tokyo today in an effort to persuade Japan Airlines not to cancel its service to the territory.

http://www.saipantribune.com/newsstory.aspx?cat=1&newsID=47702