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)

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.'

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.

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.

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.

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.

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.