JAL Mileage Bank - JL eyes pulling out of 9 foreign cities: report

According to the Nihon Keizai Shimbun newspaper's Sept. 17 edition, JL is planning to ditch by fiscal 2011 through March 2012:

Sao Paulo, Brazil
Mexico City, Mexico
Rome, Italy
Brisbane, Australia
Amsterdam, Holland
Hangzhou, China
Amoy, China
Qindao, China
Kaohsiung, Taiwan

does the Sao Paulo pullout mean that JAL will no longer run
JL47/48 NRT <-> JFK <-> GRU?


if so, then it seems like the flight agreement between US and Japan will be even more unbalanced.

I suspect they will simply codeshare on DL or AA for MEX/GRU service, in keeping with the strategic investments that are being discussed.

According to the Nihon Keizai Shimbun newspaper's Sept. 17 edition, JL is planning to ditch by fiscal 2011 through March 2012:

Sao Paulo, Brazil
Mexico City, Mexico
Rome, Italy
Brisbane, Australia
Amsterdam, Holland
Hangzhou, China
Amoy, China
Qindao, China
Kaohsiung, Taiwan

Might be easier for people to understand

Amoy >>>> Xiamen :) Sorry to be picky :p

Hangzhou and Xiamen (although a lot of industry and trade in both) can be seen as tourist destinations for Japanese travellers but Qinqdao is a major business centre. There is really something JAL is not doing right at the moment if they cannot fill even ex-NRT planes to Chinese business hubs.

Not very surprised at the cutting of BNE from the JL network. I wonder what this will mean for QF on the same route.

At least one of my colleagues will not be happy with JL pulling out of this sector.

Surprising that GRU is going - I thought this route got particularly good occupancy rates, given that it is often awkward to get flights for NRT-GRU on a DONEx ticket? (Or that could just be in D.......)

Might be easier for people to understand

Amoy >>>> Xiamen :) Sorry to be picky :p

Thanks for the correction.:)

Though JAL does have serious operational/financial problems, I do think that over the last 1 or 2 years they've taken the lead over ANA on service innovation. Domestically they introduced a better first class, they have a domestic business class, separate lounges for Diamond members, and an international premium economy class that outdoes ANA's. JAL's international business class is now completely different from what it was 5 years ago (in terms of both hard and soft product), and their new international first class has some people on the ANA forum saying they'll switch from ANA to JAL.

Not very surprised at the cutting of BNE from the JL network. I wonder what this will mean for QF on the same route.

At least one of my colleagues will not be happy with JL pulling out of this sector.


Why the cut to BNE? I used to enjoy going with JAL, particularly when they had the late night flight from BNE to Tokyo and then the connection for me a few hours later into LHR, arriving there in the afternoon instead of dawn.

The one thing I didn't like was the fact that they always seemed to use older aircraft on this route. That may have put a few people off.

Trouble is, for those like myself that are on the way to/from Europe, the middle east carriers are matching the service levels of the far eastern carriers, and price is there too.

If a route is not profitable and won't, why don't they cut a few months later? Why does it take one and a half year (March 2012) to close a route? It may take that much time to open a route, not for closing. Why not just suspend for a while and wait until things get better like others? JAL is indeed a huge company that requires that long period to act on something.

I know KHH is not profitable, but too bad it is ending.:(

Why the cut to BNE? I used to enjoy going with JAL, particularly when they had the late night flight from BNE to Tokyo and then the connection for me a few hours later into LHR, arriving there in the afternoon instead of dawn.

The one thing I didn't like was the fact that they always seemed to use older aircraft on this route. That may have put a few people off.

Trouble is, for those like myself that are on the way to/from Europe, the middle east carriers are matching the service levels of the far eastern carriers, and price is there too.

There doesn't appear to be a lot of Japanese love with Eastern Australia any more. The only possible exceptions would be OOL, maybe CNS and SYD or MEL (probably SYD, not MEL).

When I was a munchkin, both QF and JL would run flights from BNE to Japan - and to various locations for that matter. Since I've grown up, gradually the two began to codeshare, then frequency went down. I'm not surprised that they've decided to cut them altogether, given also that JQ operates SYD-OOL-NRT and SYD-CNS-NRT, both sporting QF and JL codeshares (how that codesharing agreement actually happened is amazing, but there you go).

Jetstar is in the JP-Oz market now. That basically explains it all.

If a route is not profitable and won't, why don't they cut a few months later? Why does it take one and a half year (March 2012) to close a route? It may take that much time to open a route, not for closing. Why not just suspend for a while and wait until things get better like others? JAL is indeed a huge company that requires that long period to act on something.

Agree. Also I wonder if JAL will be still around on 2012...or merged/acquired.
If they need to increase seat sales then why not reduce frequency to a couple of flights a week.

Hangzhou and Xiamen (although a lot of industry and trade in both) can be seen as tourist destinations for Japanese travellers but Qinqdao is a major business centre. There is really something JAL is not doing right at the moment if they cannot fill even ex-NRT planes to Chinese business hubs.

The issue with China routes from JAL and ANA is pricing. A 2 hour flight costs about USD 1000 that is about double what Chinese carriers charge. In the first semester 2009 I noticed very empty seats on both JAL & ANA for China routes. On the other hand Chinese carriers are filling seats with discount packages (and corporate travelers switching as well). Service quality is not so good, but for a 2-3 hour flight is not necessary.

Same distance flight to Seoul will cost USD 300-400. HKG/SIN/BKK all same story, much cheaper than China (ex NRT)

According to the Nihon Keizai Shimbun newspaper's Sept. 17 edition, JL is planning to ditch by fiscal 2011 through March 2012:

Sao Paulo, Brazil
Mexico City, Mexico
Rome, Italy
Brisbane, Australia
Amsterdam, Holland
Hangzhou, China
Amoy, China
Qindao, China
Kaohsiung, Taiwan

Wow, they are quitting Amsterdam and Rome in Europe?
KLM/AZ/Skyteam must be happy with this news.
Still wondering if JL will join Skyteam or stay with OW.
Given the bad shape they're in I guess OW is not really adding the benefits they are seeking.
However, the flirts with DL/AFKL may just be a ploy to get more money from AA/BA...

According to the Nihon Keizai Shimbun newspaper's Sept. 17 edition, JL is planning to ditch by fiscal 2011 through March 2012:

Sao Paulo, Brazil
Mexico City, Mexico
Rome, Italy
Brisbane, Australia
Amsterdam, Holland
Hangzhou, China
Amoy, China
Qindao, China
Kaohsiung, Taiwan

If they do ditch amsterdam and rome, they can codeshare with CX for these

However, the flirts with DL/AFKL may just be a ploy to get more money from AA/BA...

I think they were more than a ploy. It was more like a shotgun wedding idea from the Japanese government, because they are tired of bailing out JAL. The first person to suggest it was an aviation expert on (or near) the gov't's JAL committee.

If JL pulls out of MEX, I guess they will cut the NRT-YVR-MEX flight entirely, and be left with a single frequency to YVR... not sure the YVR local market is that strong alone.

Routes JL is eying eliminating, according to The Nikkei newspaper (Sept. 23, 2009 -- page 5 on the 14th edition):

By the end of March 2010:
Narita (Tokyo)-Mexico, Qindao (China), Hangzhou (China), Xiamen (China)
Kansai (Osaka)-London, Hanoi (Vietnam), Singapore, Dalian (China), Hangzhou (China), Seoul-Incheon, Busan (Korea)
Chubu (Nagoya)-Paris, Seoul-Incheon

By the end of March 2011
Narita-Amsterdam, Rome, Brisbane (Australia)

By the end of March 2012
Narita-Sao Paulo (Brazil), Kaohsiung (Taiwan)
Kansai-Bangkok, Denpasar (Indonesia)
Chubu-Bangkok

The issue with China routes from JAL and ANA is pricing. A 2 hour flight costs about USD 1000 that is about double what Chinese carriers charge. In the first semester 2009 I noticed very empty seats on both JAL & ANA for China routes. On the other hand Chinese carriers are filling seats with discount packages (and corporate travelers switching as well). Service quality is not so good, but for a 2-3 hour flight is not necessary.

Same distance flight to Seoul will cost USD 300-400. HKG/SIN/BKK all same story, much cheaper than China (ex NRT)

Big question: why? Why are prices higher by such a large margin over NRT - HKG flights?

Routes JL is eying eliminating, according to The Nikkei newspaper (Sept. 23, 2009 -- page 5 on the 14th edition):

By the end of March 2010:
Narita (Tokyo)-Mexico, Qindao (China), Hangzhou (China), Xiamen (China)
Kansai (Osaka)-London, Hanoi (Vietnam), Singapore, Dalian (China), Hangzhou (China), Seoul-Incheon, Busan (Korea)
Chubu (Nagoya)-Paris, Seoul-Incheon

By the end of March 2011
Narita-Amsterdam, Rome, Brisbane (Australia)

By the end of March 2012
Narita-Sao Paulo (Brazil), Kaohsiung (Taiwan)
Kansai-Bangkok, Denpasar (Indonesia)
Chubu-Bangkok

Weird.
I don't understand, at least some of the route.
1) I personally hope KHH to stay, but if they are cutting, why do they wait until 2012? This route is not making money.
2) KIX-SIN?? Not enough load for this route?
3) Rome?? So in the future, people in Japan going to FCO need to connect in LHR or HKG(CX)? Last time I visited Rome, there were a lot of Japanese.

3) Rome?? So in the future, people in Japan going to FCO need to connect in LHR or HKG(CX)? Last time I visited Rome, there were a lot of Japanese.

Tourist = low yield.
Business travelers (not necessarily business class travelers) = high yield.

Anyway, the 3-year plan is very interesting. Surprisingly BKK is gone from KIX and NGO.

By the end of March 2010:
Narita (Tokyo)-Mexico, Qindao (China), Hangzhou (China), Xiamen (China)
Kansai (Osaka)-London, Hanoi (Vietnam), Singapore, Dalian (China), Hangzhou (China), Seoul-Incheon, Busan (Korea)
Chubu (Nagoya)-Paris, Seoul-Incheon

NGO-CDG, NGO-ICN, KIX-LHR, KIX-DLC, KIX-ICN (substitute by KIX-GMP) are already confirmed, but there are many others.. By the way, eliminating KIX-SIN means KIX-KUL is also to be gone? (currently KIX-SIN-KUL)

If they do ditch amsterdam and rome, they can codeshare with CX for these

Or Finnair via Helsinki. All AY flights from Narita are already JL codeshares.

Or Finnair via Helsinki. All AY flights from Narita are already JL codeshares.

Yes, all AY flights between Tokyo-Narita, Osaka-Kansai and Nagoya-Chubu are all carrying JL code already.

The issue with China routes from JAL and ANA is pricing. A 2 hour flight costs about USD 1000 that is about double what Chinese carriers charge. In the first semester 2009 I noticed very empty seats on both JAL & ANA for China routes. On the other hand Chinese carriers are filling seats with discount packages (and corporate travelers switching as well). Service quality is not so good, but for a 2-3 hour flight is not necessary.

The Japanese carriers offer discount fares too, but they generally sell these through consolidators/package companies, not always through their own web sites. I am not sure why. It depends on your destination, date of travel and date of purchase.

If the routes are losing money now, why are they only cancelling them in 2-3 years? This is the kind of "restructuring" they don't need. :td:

The Japanese carriers offer discount fares too, but they generally sell these through consolidators/package companies, not always through their own web sites. I am not sure why. It depends on your destination, date of travel and date of purchase.

Government regulation which severely restricts (to all carriers advantage) the pricing on websites. Believe it or not.......

Tourist = low yield.
Business travelers (not necessarily business class travelers) = high yield.

Anyway, the 3-year plan is very interesting. Surprisingly BKK is gone from KIX and NGO.



NGO-CDG, NGO-ICN, KIX-LHR, KIX-DLC, KIX-ICN (substitute by KIX-GMP) are already confirmed, but there are many others.. By the way, eliminating KIX-SIN means KIX-KUL is also to be gone? (currently KIX-SIN-KUL)

They are banking on their codeshare with TG continuing......although it hasn't at NRT.

The OB at JL are absolutely not interested in reforming.....there is a tonne of fat to cut. The route cuts and lay-offs proposed barely scratch the surface.
Take a close look at the JL Group level to see what I mean ! They are involved in many businesses that could be sold off !

http://www.jal.com/ja/group/gyosyu.html#food

2) KIX-SIN?? Not enough load for this route?
I was on JL722 SIN-KIX this time last year. From memory, was quite full, but then again, that was just before the whole GFC thing started.
I was on JL721 (SIN-KUL) on the 24th. Not very full, maybe about 60 people with 3 in J. I'm on the other sector of 721 (KIX-SIN) next week.

Currently, the two 767s that go to KUL operate like so:
NRT-KUL-SIN-KIX (JL723 > JL722)
KIX-SIN-KUL-NRT (JL721 > JL724)

If JL dumps the KIX-SIN, they'll need to retime 723/724 so the same aircraft makes the return to NRT.

Why the cut to BNE? I used to enjoy going with JAL, particularly when they had the late night flight from BNE to Tokyo and then the connection for me a few hours later into LHR, arriving there in the afternoon instead of dawn.

The one thing I didn't like was the fact that they always seemed to use older aircraft on this route. That may have put a few people off.

Trouble is, for those like myself that are on the way to/from Europe, the middle east carriers are matching the service levels of the far eastern carriers, and price is there too.

From Sydney is way better than Brisbane.

777 instead of 767 ... tick!
Newer shell seats... tick!
More points (QF) as it's in next zone from SYD-NRT ... tick!
Better lounge facilities in SYD.... tick!

Not surprised they are pulling it.

Take a close look at the JL Group level to see what I mean ! They are involved in many businesses that could be sold off !

http://www.jal.com/ja/group/gyosyu.html#food

If you look at JAL's line-item financials, the non-airline businesses (ground servicing, hotels, travel agency, credit cards etc) are the only ones that consistently yield a profit. The core flying business teeter-totters between being very profitable and very loss-making. To JAL's credit, they have managed to sell off a lot of non-core business in recent years, but non-core business is not really the problem for them. The problem is their core business: too many routes, too many planes, and no coherent strategy to make it all consistently profitable.

If you look at JAL's line-item financials, the non-airline businesses (ground servicing, hotels, travel agency, credit cards etc) are the only ones that consistently yield a profit. The core flying business teeter-totters between being very profitable and very loss-making. To JAL's credit, they have managed to sell off a lot of non-core business in recent years, but non-core business is not really the problem for them. The problem is their core business: too many routes, too many planes, and no coherent strategy to make it all consistently profitable.

If they had done such a good job they wouldn't have had a 1 billion dollar loss last quarter, the only restructuring I see is creating "ko-gaisha" and forcing poor terms on the staff. This has led to a decline in the service, lower cabin factors, and of course yield. They are like every other former government airline always wanting a public handout.I believe they will get rid of the non-flying assets first because as you point out they are the only assets that consistently turn a profit.

It seems as if eventually KIX and NGO will run out of international flights to host.

This is my first post on JL forum and I find the quoted journal articles announcing cuts in routes in 2010, 2011 & 2012 quite amusing.
JL is bleeding cash. Cuts in routes and frequency must be done immediately, as many other airlines have allready done. (As someone mentioned, this will hopefully allow to park many old aircrafts with horrible seats that deter so many pax).
Currently, many companies are not booking on JL anymore coz they are worried of bankrupcy and uncertain route cuts. So a drastic plan has to be announced in the next few weeks/days or the situation will get even worse. A long term plans involving cuts in 2011/2012 might be the Japanese way, but is surrealistic today.
Hoping that some airlines will be ready to rapidly provide serious money given their current financial status is a dream, certainly for BA...