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Unprofitable routes catch the JAL axe

Date Posted: 2007-02-01

Financially troubled Japan Air Lines is preparing to shed ten of its unprofitable domestic routes, including one to Okinawa.

The airline announcement comes only days ahead of a new business plan designed to improve JALs fortunes. A JAL spokesman, Executive Officer Kunio Hirata, says the February 6th announcement will focus on medium-term measures to boost revenues and slash costs. Flight route changes, coupled with other operational measures, are expected to boost revenues by 6 billion this year.

Ten money-losing routes will be phased out starting in the next few weeks. Daily flights between Kagoshima and Naha will be dropped, while seven weekly flights between Nagoya and Kitakyushu, between Kobe and Sendai, and between Nagoya and Nagasaki will be chopped. Four flights per week will be dropped between Fukuoka and Aomori. Flights on five routes will be reduced, including those between Fukuoka and Sendai, and Sapporo and Nagoya.

JAL will be increasing flights on the Ishigaki-Kobe route, a boost for Okinawa tourism. The airline says there will also be increases in the Osaka-Sapporo and Osaka-Fukuoka routes.

JAL, which merged its operations with Japan Air Systems in 2004, has muddled through a series of financial difficulties triggered by aircraft safety problems and internal management circumstances over the past year or so. Rival All Nippon Airways has aggressively promoted its customer service, modern aircraft availability, and flight safety as it competes with JAL.

Japan Air Line saw its revenue projections for this fiscal year, which ends March 31st, dip 25 billion to 678 billion. The airline has been spinning off non-essential corporate operations in a move to boost corporate profits, which are well below those of a year ago.

The airline is set to retire its eight McDonnell Douglas MD-87 airplanes in coming months, replacing the aging planes with Boeing 737-800s. The Boeing 737s, the worlds most popular aircraft, use only a third the fuel as the older MD-87s. The new planes will be placed into service between Haneda Airport and other domestic points.

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