JAPAN Airlines (JAL), which recently completed a dramatic turnaround after filing for bankruptcy in January 2010 (TTG Asia e-Daily, June 6, 2011), has played down the emergence of low-cost carriers in the Japanese market.

The Japanese flag carrier posted a recordbreaking operating profit of 205 billion yen (US$2.61 billion) for the fiscal year ended March 2012, a margin of 17 per cent – two to three times that of rival airlines.

Cost-saving measures, such as replacing older Boeing 747 aircraft with fuel-efficient planes like the Boeing 787 Dreamliner, have helped to “cut fuel bills and offer access to places not suitable for 747s”, explained JAL president, Yoshiharu Ueki.

Looking forward, Ueki said the rise of low-cost players in the Japanese aviation market, such as Jetstar Japan – in which JAL holds a one-third share, as well as AirAsia Japan and Peach Aviation, would not pose a significant threat to JAL's domestic business.

“We don’t expect Jetstar to have a tremendous impact due to the airport situation (in Japan). Currently, about 84 per cent of our domestic revenues are from Tokyo (Haneda) and Osaka (Itami) airports. Landing slots are limited; it is almost impossible to get a slot at these two airports," he explained.

“Though some (of Jetstar Japan’s) routes are in direct competition with (JAL), I don’t see a large impact on passengers and revenue," he added. "We believe the LCC represents a new mode of transport and creates demand in a market that we don’t (serve)."

Meanwhile, Ueki lauded Japan’s extension of the multi-entry visa facility for Chinese travellers (TTG Asia e-Daily, July 5, 2012).

“We are happy to see arrival numbers increase – this proves that visas are a barrier to tourism,” he said. “We are interested in China and have made applications for more landing slots at Beijing and Shanghai international airports, but these are hard to obtain as both airports are extremely crowded.”