JAL formally established the new corporate entity Aug. 2 under the interim name TBL Co. Ltd. JAL owns 100% of the company and named Shinto Nishida as representative director responsible for the organization. Its headquarters will be at Tokyo Narita Airport.
Speaking at the Boyd Group International Aviation Forecast Summit in Denver Aug. 20, JAL VP-global sales Steve Smith said the main driver for establishing a long-haul LCC was that forecasts show 50% of the seat market share in Asia will be LCC—and the LCC share will reach 50% even sooner in Europe and North America. “That’s one in every two seats,” Smith noted. “We are a high-yield carrier and we are missing out on a big part of the market.”
The plan is for the JAL LCC to start services in the summer of 2020—the same year Japan will host the summer Olympics—with two 787-8s.
The oneworld carrier has 29 787s in its fleet with one of the industry’s least dense configurations of between 161 and 186 seats, Smith said. For the LCC, JAL is looking at configurations in the 290-300 seat range, he said.
Beyond the LCC startup, JAL is embarked on a strategic plan to increase the number of cities it serves from 343 to 500 and to make non-Japanese sales account for 50% of its revenue. More than 30% of Japan’s population is aged 65 or older and the country’s population is in decline, so it is important to stimulate the overseas market and drive it to Japan, Smith said.
A lot of the city destination growth will be done via JAL’s partner airlines, Smith said. Beyond its long-time business partners such as Dallas/Fort Worth-based American Airlines, British Airways, Finnair and Spain flag carrier Iberia, JAL is working to establish new partnerships with China Eastern and Hawaiian Airlines. If approved, the China Eastern partnership would give JAL 80 more destinations in China, Smith said.
JAL is also investing in new business opportunities. As part of that, it has made a $10 million investment in US entrepreneurial company Boom Technology, which is developing a 55-seat supersonic airliner that Boom says could enter service as early as 2025. JAL’s investment secures it options for 20 aircraft.
“What makes this airplane very interesting to us is it will cut flying time [from the US] to Asia in half,” Smith said. “You will see people willing to spend money because it will save time.”
(Karen Walker - ATWOnline News)