Chiangi

The latest edition of Shukan Gendai weekly ran a rather big article under the headline 'JAL-ANA grand merger to change skies in Japan.'

Penned by Takashi Arimori, a journalist specializing in business news, it cites quotes by unnamed sources from ANA, JAL and the transport ministry and offers scenarios for a merger of Japan's two biggest airlines.

(1) JAL falls into red in fiscal 2008, which is through March 31 this year and its midterm management plan fails as a result. ANA would come to 'rescue' JAL. JAL would be split into the international service, which would be merged with ANA. JAL's cargo division would be sold to other companies such as trading houses. JAL would remain as a domestic service-only carrier.

(2) JAL falls into red or both JAL and ANA fall into red. JAL and ANA would spin off their respective international services and merge into one, which would likely be run under the initiative of JAL since JAL is better positioned to run international services, given the history. The new entity would be called JANA.

The writer cites as a background consolidations taking place in Europe led by Lufthansa, Air France and British Airways, and in the U.S. as seen in the Delta-Northwest merger.

A transport ministry official was quoted as saying a JAL-ANA merger would be problematic for domestic services due to antitrust concerns (as it would completely eliminate competition) but two Japanese airlines may not be necessary for international services.

Watch out for earnings news for JAL and ANA, it says.

macabus

Wow, this is very big news.

I really like both airlines, and hope they won't diminish the quality in the event of a merger.

nologic

Wonder whether OW or *A would be the winner?

stevenshev

That's a huge question.

macabus

Would it be possible for the merged carrier to belong to both OW and *A?

nologic

That's thinking outside the box.

JALPak

Looks like both JAL and ANA denied the rumor already.

http://www.j-cast.com/2009/01/26034217.html

According to the translation on airline route blog, "However, both companies responded they have no intention to merge. ANA says it is looking at all options, including filing a complaints/protest against the magazine for false report."

Chiangi

If I read it correctly, the quote from ANA's PR unit should have been translated:

"We would like to withhold any further comments including (on whether we would) lodge a complaint to Shukan Gendai."

「（週刊現代への抗議申し入れなど）検討することも含め、これ以上のコメントは控えたい」（A NA広報室）

Nowhere does it say it is looking at all options.

Or am I looking at the wrong link?

keihin_242

Why not? Both airlines already engage in price fixing HND-CTS and other routes without Shinkansen competition, so they might as well make it official./sarc

Seriously, I would hope this does not happen as I believe the competition with JAL to be good for the industry. As much as I love NH, I don't want to see a situation where they totally dominate domestic air travel in Japan. It's probably inappropriate to compare NH to DL in any way, but DL's been playing dirty tricks since the path was cleared for it to become the world's largest airline and I don't care to find out what the "enhancements" of a JL/NH merger would be.

And JANA? Pass.

JALPak

I think that's the correct link (I just copied it from that blog). Thanks for translating that (I can't read Japanese ).

So did they actually deny the rumor?

JALPak

If it does happen, would that make JANA the largest airline?

keihin_242

I doubt it, as DL & NW have many more aircraft and serve many more destinations. But that may make a dominant Japanese airline the biggest in Asia.

joejones

Depends on how you count, really. By revenue passenger-distance a fully merged JANA would be about #5 -- behind DLNW, AA, AFKL and UA. They would have about 100m passenger enplanements per year, though, which might edge out WN as #1 in the world. (I think WN is #1, anyway.)

That said, I don't think this would ever happen. Both carriers have been consolidating their international and domestic operations for a while now, and I don't see why they would suddenly choose to reverse that process. I find it more likely that JAL (and/or ANA, as required) would simply downsize -- perhaps spin off business units, maybe farm out more stuff to lower-cost divisions.

The Japanese tabloids come up with business conspiracy theories all the time...

jimyvr

I should elaborate that "all options" thing. all options on the protest, or perhaps a lawsuit, not merger

Unimatrix One

I really hope this never happens. A JANA monopoly would certainly lead to deterioration in service quality. One of the great things about the Japanese air travel market is the robust competition between JAL and ANA that keeps service standards so high.