“It’s a difficult time
for JAL, but I’m sure
they will find a way to
solve their issues in the
coming months.”
one option to be considered.
JAL’s cargo division could be
one of the parts deemed unworthy
of keeping. In the year that ended
March 31, 2009 JAL suffered a $210
million deficit in its cargo business. Its international cargo volume
dropped 39 percent in the first three
months of this year, followed by
a 23. 4 percent drop in the second
quarter. It has been hammered by
steep decline in Japan’s international
trade. Exports have fallen for 11
months in a row, imports for 10 consecutive months.
In August JAL admitted publicly
that its co-operation with Nippon
Cargo Airlines was headed beyond
their transpacific codeshare deal
that came into effect at the start of
this year. JAL and NCA parent Nippon Yusen Kaisha have been talking
about a fully-fledged merger of the
two air cargo entities, a step that
would create a behemoth with 17
freighters and another 14 on order.
“Through a major restructuring of
the cargo business and by combining
the strengths of the two largest cargo
operators in Japan to form the biggest solitary Japanese cargo transport provider, JAL and NCA foresee
being able to secure profitability and
raise the value of both companies,”
JAL commented.
For its part, NYK has been under
pressure from investors to move
away from NCA. After the logistics
giant had taken the majority stake in
the airline, NCA had embarked on an
ambitious expansion plan that called
for its fleet to swell to 24 freighters
by the end of fiscal 2013. This past
June management froze the plan for
the next three years and decided to
keep the fleet count at eight units
through fiscal 2012.
According to sources in Tokyo, a
joint cargo airline would most likely
have a third partner holding a minority stake in the carrier. Earlier
on, JAL had been in talks with large
trading houses (notably Mitsui) to
form a joint venture company for its
cargo business. JAL’s troubles led to
the shelving of these negotiations,
but the trading house might take a
position in the amalgamated carrier.
JAL’s ongoing difficulties could
open the door to other constellations
for its cargo business, though. Delta,
which has a strong presence in the
Japanese market, has reportedly offered to invest about $334 million
in JAL. This prompted signals from
American Airlines, JAL’s partner
in the oneworld alliance, about a
possible counter-offer, perhaps in
tandem with British Airways and
Qantas. None of the carriers involved
has commented on the matter, but
JAL announced in early October that
it would suspend these talks while
it was working with the government
task force on its restructuring plan.
Meanwhile the carrier’s all-cargo
network has shrunk further. Effective
Oct. 25, JAL suspended its freighter
service to London.
Forwarders are confident that the
airline will remain a partner for them
but are unhappy about some of the
cutbacks. “It’s a difficult time for
JAL, but I’m sure they will find a way
to solve their issues in the coming
months. The reduced JAL freighter
network has a negative impact for us
as a customer,” commented Charles
Kaufmann, chief executive for North
Asia and senior vice president, airfreight, North Asia Pacific of DHL
Global Forwarding. ACW
“Others have fixed dimensions. We provide all the space you need.”
