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.
2010-09-01
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.
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.
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.
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
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 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
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%.
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.
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.
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.
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