2010-11-22

SKYMARK Airlines to Launch International Routes from 2014


from Nikkei Shimbun, November 12, 2010

Skymark Airlines showed its plans to inaugurate international scheduled flights from Narita International Airport to three destinations of London, Frankfurt and New York, starting from 2014. The carrier, so far flying only domestic routes, will introduce  six Airbus A380 for this venture and may introduce about half of legacy carriers.

Skymark's A380 will seat as many as 394 with business class accounting for 30%.

Skymark will decide to add 9 more A380s by seeing the performance of the first three routes for more expansion of international routes such as Paris, Los Angeles and Bangkok from Kansai and Chubu International Airports.

For Airbus, this order is the first of A380 in Japan where Boeing aircraft account for 80% in the market and may become a milestone for Airbus.

2010-10-26

New Civilian Rescue Flying Boat from ShinMaywa Coming Up

 
ShinMaywa (www.shinmaywa.co.jp) will look for future sales of its civilian version of US-2 flying boat, currently employed for search and rescue aircraft at Japan’s Defense Ministry, by setting a strategic unit price of 7 billion yen (about US$88 million) , 30% off the price of the original defense version.

Bombardier is its main competitor in commercial market; however,ShinMaywa’s is superior in the performance but less competitive in price tag; the Takarazuka, Hyogo-based company redesigns the standard equipments and its production processes to lower unit cost of the aircraft.

US-2 is currently used by Japan Maritime Self Defense Force for rescue mission as well as medical transport from remote islands.  The flying boat can be turned to fire fighting aircraft as well. The company says it has received more than 70 inquiries to the aircraft from southeast Asian, European, and Middle Eastern countries.

US-2 is a follow-up of US-1 flying boat and its orgin dates back to 1960’s PS-1, anti-submarine patrol flying boat. ShinMaywa inherits the engineering experience of Kawanishi Aircraft,  known for successful production of Type-2 flying boat, four-engine large type, used by the Imperial Japanese Navy during WW2 that once flew over Pearl Harbor for reconnaissance missions.

Specifications of US-2
 Crew: 11
 Length: 33.25 m
 Wing span: 33.15 m
 Max take-off weight: 47.7 t
 Max take-off weight (waters): 43.0 t
 Power plant: Rolls Royce AE2100J turboprop (4,591shp) x 4, LHTEC T800 for boundary controlling
 Max speed: 315 kt
 Cruise speed; 260 kt
 Range: 2,500 nm (4,700 km)
 Water take off length: 280 m
 Water landing length: 310 m
 Pressurized cabin
 Glass cockpit

2010-09-01

Incrediby Shrinking Japan Airlines

from Sankei Shimbun August 30,2010 and others


Japan Airlines will submit its rehabilitation plans to the Tokyo District Court on August 31 upon approval of the cabinet ministers. On the same day at evening, Chairman Mr. Kazuo Inamori will meet the press conference with Ken Ohnishi, President with officials of Enterprise Turnaround Initiative Corporation of Japan (ETIC), serving as JAL’s receiver.

The plans call for 1) write-off of its debt of 521.5 billion yen (about $6 billion) by syndicate banks 2) new investment by ETIC 3) slashing of employees up to about 16,000  at group wide 4) abolish 45 routes, domesitc and international, by March 2011.

JAL has announced its plan to merger JALWAYS, its subsidiary operator as well as its accounting firm in this year.

JAL wishes to see its stocks relisted at Tokyo Stock Exchange by the end of 2012 after a further restructuring and increased corporate values. The airline hopes to repay 350 billion yen of public fund by selling its stocks. The district court will decide on the approval to the plans by the end of November.

Accotrding to JAL’s plans, the airline is considering to launch its own LCC subsidiary. Its rival ANA has issued its plans to start low cost carrier earlier in August.

2010-08-04

ANA to Launch its LCC Subsidiary

Reported by Mainichi Shimbun, August 2, 2010

    All Nippon Airways (ANA) will accept capital participation from various parties including non-Japanese airlines as well as investment funds for launching of its new affiliate low cost carrier. ANA plans to start operations of its new LCC brand in 2011 with airfare level as low as half of major airlines.
    ANA expects to collect capitalization over 50 billion yen (about 0.6 billion USD) in which ANA holds 50% as the biggest shareholder. Current regulations in Japan calls for constraining foreign capital participation at one third at highest, it is believed that ANA will welcome funds from foreign airliners and other funds around 20% mark. Whereas in domestic front, ANA will ask more numbers of travel agents and hotels that can make more synergy effect by joint founding of the new airliner.As for top executive of the new company, ANA wishes to head hunt anyone with robust experiences at LCCs outside Japan. ANA also studies feasibility to hire those pilots who were fired by JAL as a part of the airliner’s restructuring.
    ANA will ask the Japanese government to lower its landing fees at domestic airports as they are higher than international standard as well as other airport service costs.

2010-07-28

Japan’s Private-Public Joint Space Business Mission to Visit Latin America

From Nihon Kogyo Shimbun, 26 July 2010

The Ministry of Economy, Trade and Industries (METI) is going to organize a joint business mission with delegates of major private sector players to Latin America in order to sell Japanese satellite products for earth observation as well as communications and broadcasting. The mission will visit Brazil, Argentina and Peru for two weeks starting August 23.  Its private sector members include NEC, IHI, Mitsubishi Heavy Industries joined by Fujitsu, Hitachi, Mitsubishi Corporation and JAXA.

Brazil and Argentina have potential market needs of satellite use for forest watching, agricultural management and harvest forecasting. Brazil, in particular, is going to start full-fledged development of radar-equipped satellite for all weather observation where Japanese side can appeal with their expertise.

2010-07-17

JAL's Debt Ballons, Growing Distrust among Banks

 The amount of excessive debt of Japan Airlines, under corporate rehabilitation process, has amounted to JPY1 trillion or US$1.11 billion level. The main reason of swallowing debt is attributed to book accounting to record the cost of disposal of older aircraft and other restructuring as ‘loss’. On the other hand, the former board members,those  who were supposed to take responsibility of the collapse of the company, are found as serving as the board of JAL’s affiliated corporations; thus the distrust of bank syndicate has reached to its peak as they have been requested by JAL to abandon a part of their loans; it would be inevitable to foresee a hard time to reach their agreement  within August.

A bank executive who was briefed  by JAL on July 1 outburst-ed  his emotion by saying ‘I cannot understand how come you added more amount to abandon by us.’

JAL’s excessive liabilities amounted to  JPY 950 billion (approx USD 10.6 billion) on consolidated basis, higher than when the company filed for corporate rehabilitation process by JPY100 billion. Accordingly JAL wishes to ask the banks for debt waiver of extra 50 billion yen.

A reduction of personnel as a whole group, targeted 16,000 in total, calls for additional reserve of hundreds of billion yen for additional payment for their early retirement.

JAL is  to receive public funding of 300-350 billion yen while the banking insertions are requested to abandon their liabilities. The airliner is obliged to announce publicly of  their loss to keep transparency in return of receiving public fund, but the JAL has not disclosed the details yet.

Distrust feeling of the bank syndicate comes from not only increased amount of liabilities as requested.  The former board of directors at JAL all quited as the company filed for bankruptcy but H. Nishimatsu, then-president, got a seat of president of JAL Foundation while some others got board members at JAL affiliated companies by June. An  executive of the bank syndicate commented ‘A post of president is paid nothing but the post is honorable seat for those who completed all duties. Clearly the company lacks for sensitivity for how it would be perceived by the society.’

JAL’s liquidation process  has protected general business liabilities such as aircraft leasing and fuel cost to ensure ‘continued operations’ and, in return, the rate of liability write off was set abnormally high.

In addition, JAL is requesting the banks of refinancing for replacement of its aircraft; currently the company has submitted a JPY 360 billion plan that was reacted by the banks thinking JAL is asking too much.

JAL’s performance shows a steadfast recovery as shown in May when its international service utilization rate was 70.8%, an improvement by 14 points than the same month of the previous year.

2010-06-05

Mitsubishi Aviation Will Start MRJ Production from September

Mitsubishi Aviation, a subsidiary of Mitsubishi Heavy Industries, revealed its plan to start production of Mitsubishi Regional Jet (MRJ), Japan's first jet passenger aircraft, from September.

Production of its components will start at Oye Plant of Mistubishi Heavy in Nagoya. Final assembly will take place at Mitsubishi's Komaki South Works neighboring Nagoya Airport in 2011.

So far ANA has placed order for 25 MRJs while Trans States Holdings ordered as many as 100 aircraft. Mitsubishi is reportedly talking with several airlines in US and European nations.

The first flight is scheduled in the second quarter of 2012; the first delivery is targeted in the first quarter, 2014.

2010-05-15

Narita to Welcome More Business Jets

The government of Japan will launch a package of new policy to stimulate growth of economy, one of them is dealing with Narita International Airport for its deregulation and construction of exclusive facilities for smaller business jet aircraft.

The idea behind this new policy is to make it easier for global business leaders to convene conferences in Japan or for affordable people to come over here to undertake medical services, thus pushing Japan's economic boost.

Narita's new exclusive terminal for business jets will be completed by March 2013 while the current regulation of parking a business jet on its tarmac of maximum seven days to longer or abolished.

Landings of business jets at Narita totaled 2,100 and 500 at Haneda, closer to central Tokyo, both are incomparably fewer than 255,000 at six airports around New York.

Japanese Ministry of Land and Transport estimates Japan has lost as many as 4,000 flights by business jets as the country's poor infrastructure for corporate business jet incoming flights; the loss of opportunity were compensated by organizing the original conferences in other countries.

Haneda can accommodate business jets but the airport regulates prior application by seven days while parking is limited up to five days. Deregulation at Narita ahead of Haneda; as hub function at Haneda is given more priority, Narita has a fear of losing its significance as gateway to Japan as it was originally designed.

The number of business jets are on rise since 9-11 as security of business elites are of greater concern and U.S. general aviation forecasts it will grow as many as 20,000 in 2016 from 12,000 in 2006.

2010-05-01

ANA Posts Biggest Deficit

All Nippon Airways (ANA, Tokyo Stock Exchange stock code #9202) has announced its latest consolidated financial closing with a loss of 57.3 billion yen (about 0.6 billion US dollars), surpassing 4.2 billion yen deficit at a year ago as its biggest deficit in a single year.

 The deficit should be attributed to sluggish growth of passenger revenue which came from fewer passengers by bad economy as well as new type of flu last year. Fewer business class passengers as well as intensive competition lowered average price of seat in every flight; domestic seat price was reduced by 3.3% from previous year while 30.1% drop was seen in international flights.

As for the coming year ending March 2011, ANA expects gross sales revenue of 1,360 billion yen or 10.7% higher than this year with final profit of 5 billion. ANA counts on recovery of traffic demand and more revenue as expansion of its slots at Tokyo's two international airports at Haneda and Narita.

Its rival Japan Airlines will withdraw from 45 air routes in this year in both domestic and international market. ANA does not think it will benefit from JAL restructuring. Volcanic effect of Iceland in April is believed to lower ANA passenger revenue by 1 billion yen and 0.5 billion yen in profit.

2010-04-27

JAL Reports Record-High Deficit Ever



Japan Airlines, under corporate rehabilitation, will report around 160 billion yen ($1.7 billion) of operating deficit in its corporate account closed  in March 2010. The deficit level is the largest since 2002 as the result of big drop in passenger revenue; the company reported 50.8 billion yen of deficit a year ago.

The worsening revenue will hasten its restructuring such as a further trimming of payroll as well as stopping of money-losing air routes.

JAL's international passenger revenue saw over 40% shrinking in a period from April to December last year while its domestic passenger revenue also showed over 10% drop. Its passenger revenue after January still shows no sign of recovery.

However, its principle subsidiary, Japan Airlines International as operating company has found a turnaround in March with a small amount of black ink with the effect of replacement of its fleet  by smaller and fuel-efficient aircraft.

JAL and its supporter, Enterprise Turnaround Initiative Corporation has submitted its restructuring plans consisting of withdrawal from 47 air routes after October and slashing over 16,000 personnel by the end of March 2011 to its main transaction banks.

But the banks felt the plans was insufficient for JAL to gain profit and calling for more stringent measures such as addition of international service to withdraw. In response to their objection, JAL and ETIC will postpone their submission of corporate rehabilitation to the Tokyo District Court to August from original June.

2010-03-21

ANA Getting Ready For First Delivery of 787


All Nippon Airways invited the press to training facilities of Boeing 787 mechanics on March 12. Unlike conventional training centering around class room sessions with paper documents, 787 course features all manuals in electronic format available at PC for trainees, while other PCs enable them to see cockpit as well as other parts of the aircraft, making them to join in simulated repair works. ANA also introduced flat panel trainer, simplified flight simulator, to lower training cost.

Currently the first batch of 12 mechanics are undertaking the training in Japan; they will go to Boeing at Seattle by the end of this month and when they pass the examination using the actual 787, they will be certified as instructor mechanics.

ANA's 787 order totals 55 and the airliner expects to receive the aircraft sometime in the fourth quarter as the launch customer of new Boeing airliner.

2010-03-06

IHI and Boeing Team Up for New Fuel Cell System for Aviation

IHI announced the company will collaborate with Boeing for development of fuel cell system for aircraft. The working principle of the system is to use power generated by jet engines more effectively so that it will lead to reduction of fuel carried by aircraft. Its development is scheduled to complete by 2011 and probing experiment will start from 2013 on board aircraft.

IHI will develop the system from power-recycle fuel cells used for galley on board.  IHI will work on development of the fuel cell and its coordination with jet engines while Boeing will work on harmonization of the system with power supply on board.

If successful, it is hoped to curtail fuel consumption of commercial aircraft service by around 1%.

2010-02-08

JAL Goes Back to AMR, Rejecting Delta

New leadership of JAL, Kazuo Inamori, Chairman of the Board revealed his opposition for JAL to change its alliance membership from One World to Sky Team.

JAL management is tilting to reflect Inamori's opinion and will announce Delta Airlines to discontinue their talks on joint venture within this week.

Inamori and new president K. Onishi had expressed their statement to review the selection of joint venture partners from 'blank sheet' again as they assumed their positions in early this month.

Grounds of Inamori's opposition to change alliance membership are seemingly financial and business reason, and he fears to see extra costs of changeover as well as decrease in sales if JAL joins Sky Team. He rather prefers to see recovery of JAL operations by keep staying at One World alliance.

2010-02-07

JAL-DELTA JOINT VENTURE TALKS STARTS OVER AGAIN

FROM Yomiuri Shimbun, FEBRUARY 7

Japan Airlines, once made a basic agreement with Delta for strategic alliance, has decided to start the talk afresh.

This decision reflects the opinions of Kazuo Inamori, a new chairman of the board. JAL will compare the two possible partners, Delta and American Airlines and will make a final decision after February 8 when its board will be filled by new members.

Originally JAL planned to announce details of a new joint venture plans with Delta in early February since they had reached an agreement with Delta on working level.

Joint venture with Delta is being endorsed by more from Enterprise Turnover Initiative Corporation who acts as receiver of JAL's rehabilitation as well as the Ministry of Land and Transportation as Delta has more density of air routes.

On the other hand, JAL is now a member of One World alliance member and it will change its membership to Sky Team if JAL-Delta joint venture comes true.Inamori as well as some members of JAL board are reportedly insisting a further study a possible confusion and effect to corporate profit by alliance membership changeover.

2010-01-29

New Transport XC-2 Succeeds in First Flight


XC-2, a prototype of next military transport for Japan's Air Self Defense Force made its first flight at Gifu Air Base on January 26.

The flight was originally scheduled in September 2007. However, as a series of troubles found as such as lack of structural strength of components and its development plans has been delayed extensively.

Project CX was started in fiscal year 2001 to replace old and smaller C-1 transports. Kawasaki Heavy Industry is the prime contractor and numerous makers and suppliers are engaged in its manufacturing. The development was done concurrently with the next maritime patrol aircraft XP-1 for Maritime Self Defense Force by the same prime contractor, thus keeping the development cost lower as about 340 billion yen (approximately US$38 billion)  for the two aircraft types.

With its extended range, XC-2 or C-2 when deployed to JASDF, is expected to help Japan's overseas relief mission as well as usual domestic defense air lift service.

The dimension of XC-2 is as follows:
    Length: 43.9 meters (144 feet)
    Span: 44.4 meters (145 feet)
    Height: 14.2 meters (46.5 feet)
    Power Plant: GE CF6-80C2 (thrust 27.9t, 61,510 lb) x2
    Payload: 37.6 t (82,890 lb)(maximum)
    Range: 0t/10,000km 12t/8,900km (4,800 nm); 30t/6500km (3,510 nm); 37t/5600km (3,024 nm)

2010-01-21

Should ANA Succeed JAL's International Flights ?



January 20

Japan's Transportation Minister, Seiji Maehara, has told it is necessary to examine if JAL and ANA should be integrated in international operations within as long as three years for Enterprise Turnaround Initiative Corporation commits itself for the support of JAL after its bankruptcy. At previous press conference, the minister suggested a possibility to stop the current policy to keep two major carriers of Japan. A merger of JAL and ANA in domestic flights may violate the anti-monopoly law and Maehara said this possibility is out of study.

Maehara told the press that 'two-major-player system could be sustained but if not, it is an option to integrate JAL and ANA in international operations.'  He also stated he is in negative position to relax the current regulations on foreign capital participation to Japanese carriers by saying 'we should be cautious for that.'

2010-01-19

JAL Bankruptcy Filed

Breaking News
JAL Files For Bankruptcy, With Record High Total Debt of Y2.3Trillion


Japan Airlines, with its two subsidiaries, filed a petition for protection with the Tokyo District Court under the Corporate Rehabilitation Law and the court issued its acceptance to start the procedures on afternoon, January 19. With total debt of ¥2,320 billion, JAL rewrote the history of corporate failure in the past. Simultaneously Enterprise Turnaround Initiative Corporation (ETIC) formally decided to support JAL's rehabilitation and is ready to infuse a total amount of ¥900 billion. Accordingly, on the same day, Tokyo Stock Exchange classified JAL stocks as special category, a step before desisting of stocks; TSE today announced JAL stocks will be desisted on February 20. 

Asteroid Probe Hayabusa Is Coming Home With Rock Sample

 

Hayabusa, Japan's space probe that challenged to collect sample of rocks on an asteroid as an unprecedented attempt in human history, has reached to an trajectory to enter Earth's gravitational sphere, Japan Aerospace Exploration Agency (JAXA) announced on January 14.  With this, the chance for Hayabusa to return to Earth is almost definite as well as enhanced possibility to collect its capsule with collected rock sample.
 
Hayabusa was launched in May 2003, headed for asteroid Itokawa orbiting between Earth and Mars; it succeeded two times of landing and lift off from the asteroid. The probe encountered mechanical trouble two times and its scheduled return to Earth was prolonged three years.
 
On January 13, JAXA succeeded to move the probe to trajectory to pass inside Earth's gravitational sphere, or about 1.5 million kilometers from Earth. As of January 14, Hayabusa is about 59 million kilometers away from Earth. It will keep thrusting of its main engine, electric ion unit, by mid March to approach Earth more. Hayabusa will reach Earth in June.

2010-01-16

JAL Chooses Delta

from Yomiuri Shimbun, January 16


Japan Airlines and Delta Airlines agreed to tie up  by joint operations on January 15.

JAL will sign an agreement with Delta after final authorization of its new management headed by Kazuo Inamori, new Chairman and CEO. JAL management will be reshuffled after it will file its bankruptcy for corporate rehabilitation.

Visiting Delta top management and JAL met at JAL headquarters on January 15 for final talks, reaching mutual agreement in working level.

Enterprise Turnaround Initiative Corporation (ETIC), in charge of JAL's rehabilitation, reportedly sees a tieup with Delta would improve operational efficiency of JAL's international flights, thus leading to earlier come back of JAL.

Accordingly JAL will change its alliance membership from One World to Sky Team led by Delta, wishing to complete its transition process by April 2011.

The two air lines will apply for anti-trust immunity to U.S. Department of Transportation by middle of February. If granted the immunity, they can have multiplied effect on their transpacific routes.

ETIC with a new management of JAL will continue to assess Delta's proposal for capital participation to JAL.

2010-01-11

JAL's Rescue Plans Calls For 15,000 Employment Reduction in Three Years

Japan Airlines is expected to file its bankruptcy on 19 January for simultaneous start of its corporate rehabilitation by Enterprise Turnaround Initiative Corp. (ETIC) while expecting support by the government of Japan. The outline of its rescue plans was revealed yesterday: according to the plans, more than 15,000 employees, equivalent of 30 percent of the entire group would be slashed in three years. ETIC would confer with JAL and its main commercial banks for details of the plans.

ETIC seems to see JAL as having excess liability of over 800 billion yen and would ask JAL's creditors to write off 730 billion yen while ETIC itself would invest 300 billion yen to capitalize JAL so that the balance sheet would turn into positive.

Both Delta Airlines and American Airlines had express their intention of financial assistance to JAL for over $1 billion respectively, but ETIC assumes JAL should not accept American capitalization on the ground their capital investment might influence the course of JAL's rehabilitation. However JAL will choose its partner for joint operations under Open Skies between Japan and USA.

ETIC is now preparing to request Mr. Kazuo Inamori, 77, honorable chairman of Kyocera, Kyoto-based integrated manufacturer of electronics and industrial ceramics, to assume CEO after the process of legal liquidation starts in January.

ETIC is also studying if JAL stocks should be maintained listed in stock exchange; currently the fund is reportedly comparing two plans to maintain the listing after capital reduction by over 90% or delist JAL stocks after 100% capital reduction.

2010-01-07

JAL's Recue Plans Getting a Shape

from Asahi Shimbun www.asahi.net, January 7

Japan Airlines to Receive Additional Y300 Billion In Return of 10,000 Persons Cut

The Enterprize Turnaround Initiative Corporation (ETIC), a public-private fund, came up with a new policy to deal with Japan Airlines that have requested ETIC for support: ETIC will agree to pay capitalization up to Y300 billion as well as hundreds of billion yen as bridge loan. ETIC, seeking for JAL's rehabilitation by legal liquidation of the airliner, is willing to put a big sum of money 'boldly enough' to avoid escalation of credit panic.ETIC, on the other hand, will ask JAL to reduce more of its employees than previous plans, possibly to a size of 10,000 in total.

ETIC, after coordination with financial institutions in advance, will formally announce its support to JAL simultaneously as JAL will file a petition and protection under Corporate Rehabilitation Law sometime in this month.

Currently JAL employs about 48,000. 'JAL Rescue Task Force,' appointed by Makoto Maehara, Minister of Land and Transport called for a reduction by 8,400 persons previously. A new plan adds more than 10,000 to be slashed.

The number of air routes to be terminated due to poor profitability would remain as many as 45 to 50, almost the same level JAL had studied internally with consideration of impact to relevant destinations.

Haruka Nishimiatsu will step down from presidency of JAL and ETIC intends to appoint a new CEO from outside the airliner. Most of current board members will be forced to quit and a new COO will be selected from present executives in age of 40s or 50s who are knowledgeable to JAL's operations.

2010-01-04

JAL Prefers Delta As Partner

From Asahi Shimbun (www.asahi.com) January 3, 2010

Haruka Nishimatsu, President of Japan Airlines, expressed his view against a solution by legal liquidation as expected by Enterprise Turnaround Initiative Corporation of Japan (ETIC), an private-public fund, to which JAL has requested for support. He also told that it would be more advantageous for JAL to change its alliance membership with consideration of new marketing strategy in Asian market with potential growth; he told his preference of Delta Airlines than Aemrican Airlines as a partner while he emphasized he has no plans for JAL to withdraw from international service.

Nishimatsu told in his interview with Asahi Shimbun that legal liquidation may lead to loss of customers for JAL as it may give wrong impression as bankruptcy. Pointing out ongoing self initiative actions of JAL such as reduction of its corporate pension payment as well as other management changes, Nishimatsu stressed JAL is already implementing almost the same solutions as legal liquidation.

JAL, assumed in a state of asset deficiency, has a high chance of being forced to legal liquidation unless ETIC supports it, consequently the decision of ETIC can determine the course of JAL's salvation.

JAL's international operations, a chief factor of its deteriorated business performance, will be shrunk, according to Nishimatsu, by abolishing of air routes and downsizing of aircraft but he threw out a possibility for JAL to terminate its international service. He believed JAL should strengthen its operations in Asian market in the future to face competition with other carriers such as ANA.

Based on that, Nishimatsu showed his view that there will be more advantageous for JAL to join Sky Team alliance that major Asian airlines such as Korean Air are members already and more Asian carries would join. JAL is currently a member of One World alliance led by American Airlines. Delta Airlines has proposed JAL to change its alliance membership while Delta has a plan to
acquire capital in JAL.

Nishimatsu reiterated his intention to resign; it is expected he will express his resignation formally before or right after a decision to support JAL by ETIC in middle or end of January.