(Japan) Japan Airlines @·AIRCRAFTUBE

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Japan Airlines

Japan Airlines Co., Ltd. (JAL) is an airline headquartered in Shinagawa, Tokyo, Japan. It is the flag carrier of Japan and its main hubs are Tokyo's Narita International Airport and Tokyo International Airport (Haneda Airport), as well as Osaka's Kansai International Airport and Osaka International Airport. The airline and three of its subsidiaries (J-Air, JAL Express, and Japan Transocean Air) are members of the Oneworld airline alliance.

JAL group companies include Japan Airlines for international and domestic services; JAL Express for international and domestic low-cost services; J-Air, Japan Air Commuter, Japan Transocean Air and Ryukyu Air Commuter for domestic feeder services; and JAL Cargo for cargo and mail services. JAL group operations include scheduled and non-scheduled international and domestic passenger and cargo services to 220 destinations in 35 countries worldwide, including codeshares. The group has a fleet of 279 aircraft. In the fiscal year ended 31 March 2009, the airline group carried over 52 million passengers and over 1.1 million tons of cargo and mail.

JAL was established in 1951 and became the national airline of Japan in 1953. After over three decades of service and expansion, the airline was fully privatized in 1987. In 2002, the airline merged with Japan Air System, Japan's third-largest airline and became the sixth largest airline in the world by passengers carried. Japan Airlines is currently an official sponsor of Japan Football Association, Japan national football team, Shimizu S-Pulse and Consadole Sapporo. The second largest in Japan, All Nippon Airways, is Japan Airlines' main rival with fierce competition between the two airlines.

Founding

Japan Air Lines Co., Ltd. was established on 1 August 1951, with the government of Japan recognizing the need for a reliable air transportation system to help Japan grow in the aftermath of the World War II. The airline was founded with an initial capital of ¥100 million; and its headquarters located in Ginza, Chūō, Tokyo. Between 27 and 29 August, the airline operated invitational flights on a Douglas DC-3 Kinsei, leased from Philippine Airlines. On 25 October, Japan's first post-war domestic airline service was inaugurated, using a Martin 2-0-2 aircraft, named Mokusei, and crew leased from Northwest Airlines.

On 1 August 1953, the Diet of Japan passed the Japan Air Lines Company Act, forming a new state-owned Japan Air Lines on 1 October, which assumed all assets and liabilities of its private predecessor. By 1953 the JAL network extended northward from Tokyo to Sapporo and Misawa, and westward to Nagoya, Osaka, Iwakuni and Fukuoka.

On 2 February 1954 the airline began international flights, carrying 18 passengers from Tokyo to San Francisco on a Douglas DC-6B City of Tokyo via Wake Island and Honolulu. The flights between Tokyo and San Francisco are still Flights 1 and 2, to commemorate its first international service. The early flights were advertised as being operated by American crews and serviced by United Air Lines in San Francisco.

The airline, in addition to the Douglas DC-3, Douglas DC-6B and Martin 2-0-2 s, operated Douglas DC-4 and Douglas DC-7C during the 1950s. JAL flew to Hong Kong via Okinawa by 1955, having pared down its domestic network to Tokyo, Osaka, Fukuoka and Sapporo. By 1958 the Hong Kong route had been extended to Bangkok and Singapore. With DC-7Cs JAL was able to fly nonstop between Seattle and Tokyo in 1959.

Jet Era

In 1960 the airline received its first jet, a Douglas DC-8, and started flying to Seattle and Hong Kong. It soon decided to re-equip the fleet with jet aircraft. At the end of 1961 JAL had transpolar flights from Tokyo to Seattle, Copenhagen, London and Paris via Anchorage, Alaska and to Los Angeles and San Francisco via Honolulu, Hawaii.

During the 1960s JAL flew to many new cities including Moscow, New York and Pusan. DC-8 flights to Europe via Anchorage started in 1961; flights to Europe via India started in 1962, initially with Convair 880s.

By 1965 Japan Air Lines was headquartered in the Tokyo Building in Marunouchi, Chiyoda, Tokyo. By this time over half of JAL's revenue was generated on transpacific routes to the United States and the airline was lobbying the United States for fifth freedom rights to fly transatlantic routes from the East Coast. The transpacific route was extended east from San Francisco to New York in November 1966 and to London in 1967; flights between San Francisco and London ended in December 1972.

Between 1967 and 1969 JAL had an agreement with Aeroflot to operate a joint service between Tokyo and Moscow using a Soviet Tupolev Tu-114. The flight crew included one JAL member, and the cabin crew had five members each from Aeroflot and JAL. The weekly flight started in April 1967; in May the schedule was 10 hr 35 min Moscow to Tokyo and 11 hr 25 min to return.

In 1972, under the 45/47 system, the so-called "aviation constitution" enacted by the Japanese government, JAL was granted flag carrier status to operate international routes. The airline was also designated to operate domestic trunk routes in competition with All Nippon Airways and Toa Domestic Airlines.

The signing of a Civil Air Transport Agreement between the People's Republic of China and Japan on 20 April 1974, caused the suspension of air routes between the Republic of China (Taiwan) and Japan on 21 April. A new subsidiary, Japan Asia Airways, was established on 8 August 1975, and air services between the two countries were restored on 15 September. During the 1970s the airline bought the Boeing 727, Boeing 747 and McDonnell Douglas DC-10 for its growing routes within Japan and to other countries.

In the 1980s the airline performed special flights for the Crown Prince Akihito and Crown Princess Michiko of Japan, Pope John Paul II and for Japanese prime ministers, until the introduction of the dedicated government aircraft using two Boeing 747-400, operated as Japanese Air Force One and Japanese Air Force Two. During that decade the airline introduced new Boeing 747-100SR, Boeing 747-SUD and Boeing 767 jets to the fleet, and retired the Boeing 727s and Douglas DC-8s.

In 1978 JAL started flights to Sïo Paulo and Rio de Janeiro via Anchorage and San Juan; the stopover was changed to Los Angeles in 1982 and to New York's John F. Kennedy International Airport in 1999. Until 2009 the airline operated fifth-freedom flights between New York and Sïo Paulo and between Vancouver and Mexico City.

Deregulated era

Japan began considering airline deregulation in the late 1970s, with the government announcing the abandoning of the 45/47 system in 1985. In 1987 Japan Airlines was completely privatized, and the other two airlines in Japan, All Nippon Airways (ANA) and Japan Air System (JAS), were permitted to compete with JAL on domestic and international routes. Increased competition resulted in changes to the airline's corporate structure, and it was reorganized into three divisions: international passenger service, domestic passenger service, and cargo (including mail) service.

Japan Airlines began the 1990s with flights to evacuate Japanese citizens from Iraq before the start of the Gulf War. In October 1990 Japan Air Charter was established, and in September 1996 an agreement with The Walt Disney Company was announced, making Japan Airlines the official airline of Tokyo Disneyland. JAL Express was established in April 1997, with Boeing 737 aircraft. In the 1990s the airline encountered further economic difficulties stemming from recessions in the United States and United Kingdom, plus a domestic downturn. Following years of profit since 1986 the airline began to post operating losses in 1992. Cost-cutting, including the formation of the low-cost JAL Express domestic subsidiary and the transfer of tourist operations to JALways (the successor to Japan Air Charter), helped return the airline to profitability in 1999.

In 1997 the airline flew Japanese prime minister Ryutaro Hashimoto to Peru to help negotiate in the Japanese embassy hostage crisis. Japan Airlines placed orders for Boeing 777s during the 1990s, allowing for fleet renewal. It was one of eight airlines participating in the Boeing 777 design process, shaping the design to their specifications.

JAS merger

In 2001, Japan Air System and Japan Airlines agreed to merge; and on October 2, 2002, they established a new holding company called Japan Airlines System), forming a new core of the JAL Group. Aircraft liveries were changed to match the design of the new JAL Group. At that time the merged group of airlines was the sixth largest in the world by passengers carried.

On 1 April 2004, JAL changed its name to Japan Airlines International and JAS changed its name to Japan Airlines Domestic. JAS flight codes were changed to JAL flight codes, JAS check-in desks were refitted in JAL livery and JAS aircraft were gradually repainted. On 26 June 2004, the parent company Japan Airlines System was renamed to Japan Airlines Corporation.

Following the merger, two companies operated under the JAL brand: Japan Airlines International and Japan Airlines Domestic. Japan Airlines Domestic had primary responsibility for JAL's large network of intra-Japan flights, while JAL International operated both international and trunk domestic flights. On October 1, 2006, Japan Airlines International and Japan Airlines Domestic merged into a single brand, Japan Airlines International.

The airline applied to join Oneworld on October 25, 2005. Japan Airlines claimed that its Oneworld membership would be in the best interests of the airline's plans to further develop the airline group and its strong commitment to provide the very best to its customers. Japan Airlines, together with Malév and Royal Jordanian, joined the alliance on April 1, 2007.

On 1 April 2008, JAL merged the operations of its subsidiary Japan Asia Airways (JAA) into JAL mainline operations. JAA had operated all JAL group flights between Japan and Taiwan between 1975 and 2008 as a separate entity due to the special political status of Taiwan.

Restructuring

In 2009, Japan Airlines suffered steep financial losses, despite remaining Asia's largest airline by revenue. As a result, the airline embarked on staff cuts and route cutbacks in an effort to reduce costs. The carrier also received a ¥100 billion credit line from the Japanese government that year. In September 2009, Japan's Ministry of Land, Infrastructure, Transport and Tourism formed a task force aimed at aiding a corporate turnaround at JAL, which examined various cost-cutting and strategic partnership proposals.

One proposal considered was to merge JAL with ANA, which would create a single larger international airline and replace Japan Airlines International; however, media reports suggested that this proposal would be opposed by ANA given its comparatively better financial performance as an independent carrier. The task force also examined possible partnerships with foreign carriers.

After weeks of speculation, JAL applied for court protection under the Corporate Rehabilitation Law (the Japanese equivalent of Administration (UK) or a Chapter 11 Bankruptcy (US) filing) on January 19, 2010. JAL expects to receive a ¥300 billion cash injection and have debts worth ¥730 billion waived, in exchange for which it will cut its capital to zero, cut unprofitable routes and reduce its workforce by 15,700 employees—a third of its 47,000 total. JAL's main creditors (Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation) originally objected to the bankruptcy declaration, but changed their mind after the Enterprise Turnaround Initiative Corporation of Japan recommended court protection, according to a senior bank official. Shares of JAL were delisted from the Tokyo Stock Exchange on February 20, 2010.

Kazuo Inamori, founder of Kyocera and KDDI, took over as CEO of JAL. Transport minister Seiji Maehara personally visited Kyocera headquarters in late 2009 in order to persuade Inamori to accept the position; task force leader Shinjiro Takagi believed that it was necessary to appoint a proven entrepreneur CEO in order to fix the various problems at JAL. Japan Air Commuter president Masaru Onishi was promoted to president of JAL.

In May, JAL began to see an increase in its passenger numbers by 1.1% year-on-year. In August, it was reported that JAL would cut 19,133 jobs from its workforce of 47,000 by the end of March 2015 – whilst also increasing capacity – in an attempt to make the business viable.

Rivalry between Delta and American

Although JAL ultimately exited bankruptcy while remaining in the Oneworld alliance, JAL was seriously considering accepting a strategic investment from Delta Air Lines and joining the SkyTeam alliance during the period between September 2009 and February 2010. JAL also had talks with Skyteam members Air France-KLM and Korean Air regarding their potential involvement.

The Delta deal was favored by the Ministry of Land, Infrastructure, Transport and Tourism because Delta had an extensive global network and had the largest Japanese operation of any foreign airline, which it had inherited through its merger with Northwest Airlines. MLIT also supported a transaction with Air France-KLM because it was a "healthier company" than American.

American planned to team up with Oneworld alliance members British Airways and Qantas to make a joint offer to recapitalize JAL. British Airways said that it was attempting to persuade JAL to remain part of Oneworld rather than aligning itself with Delta and SkyTeam, while American CEO Gerard Arpey said that American and Oneworld remained committed to a partnership with Japan Airlines, as long as it remained a major international carrier, and reiterated his encouragement for JAL to stay with Oneworld during ceremonies to welcome Mexicana into the alliance.

In an interview with the Asahi Shimbun on January 1, 2010, JAL president Haruka Nishimatsu stated his preference in forming a partnership with Delta over American, and the Yomiuri Shimbun reported shortly thereafter that JAL and the Japanese government-backed Enterprise Turnaround Initiative Corporation would likely choose to form a business and capital tie-up with Delta, as part of which JAL would enter SkyTeam and reduce its international flight operations in favor of code-share agreements with Delta, and that American Airlines had begun procedures to end negotiations with JAL. Both JAL and American denied the report. The Wall Street Journal then reported that American Airlines raised its JAL investment offer by $300 million, to $1.4 billion, and in separate comments to the press, Delta president Ed Bastian said that Delta was "willing and able to raise additional capital through third-party resources."

After JAL filed for bankruptcy, there were further media reports that JAL would leave Oneworld in favor of SkyTeam, but JAL president Masaru Onishi said on February 1 that the new JAL leadership was "seriously reviewing the issue from scratch, without being influenced by previous discussions," and its decision on an alliance partner would be made soon.

On 7 February, several news outlets reported that JAL would decide to keep its alliance with American Airlines and end talks with Delta. Inamori and ETIC officials, according to the reports, decided that switching alliances from Oneworld to Skyteam would be too risky and could hinder JAL's ability to turn around quickly. Two days later, JAL officially announced that they would strengthen their partnership with American, including a joint application for antitrust immunity on transpacific routes. The airline would also fortify its relationship with other partners in the Oneworld alliance.

Post-bankruptcy developments

JAL emerged from bankruptcy protection in March 2011. In July, ETIC announced its selection of Nomura Holdings, Daiwa Securities, Mitsubishi UFJ, Morgan Stanley, Mizuho Securities, SMBC and Nikko Securities to underwrite the sale of its equity stake in JAL, without specifying amounts or dates. On 6 January 2012, JAL announced its intent to re-list its shares on the Tokyo Stock Exchange in an initial public offering of up to ¥1 trillion, which would be the largest offering in Japan in more than a year. The airline completed its IPO on the 1st section of the Tokyo Stock Exchange (TYO: 9201

) on September 19, 2012. The Enterprise Turnaround Initiative Corporation of Japan sold all its holdings (96.5%) in JAL for 650 billion yen, greater than its 350 billion yen investment in 2010. Even though it was oversubscribed several times, post IPO increase of the stock was close to 1%.

Following its exit from bankruptcy protection, JAL began several new partnerships within the oneworld alliance. The transpacific joint venture between JAL and American commenced in April 2011. JAL announced the formation of Jetstar Japan, a low-cost carrier joint venture with Qantas subsidiary Jetstar Airways, in July. In 2012, JAL and British Airways parent company International Airlines Group (IAG) submitted applications to the Japanese government and European Union respectively in seeking a joint venture business operation for flights between Japan and Europe. Finnair applied to join the JV with IAG in July 2013, in conjunction with JAL starting new nonstop service to Helsinki.

Organization

In addition to its operations under the JAL name, the airline owns 5 domestic airlines which feed or supplement mainline JAL flights:

J-Air (JLJ) – regional jet services from Tokyo, Nagoya and Osaka
JAL Express (JEX) – low-cost jet services between secondary cities
Japan Air Commuter (JAC) – turboprop services in western Japan, mainly including Amami Islands.
Japan Transocean Air (JTA) – jet services in Okinawa Prefecture and the Amami Islands
Ryukyu Air Commuter (RAC) – turboprop services in Okinawa Prefecture and the Amami Islands

JALways was the airline's international subsidiary, which handled low-yield flights to resort destinations in Hawaii, Oceania and Southeast Asia.

JALUX Inc., established in 1962, is the airline's procurement business which handles various work for the company, including the JAL SELECTION merchandise and in-flight meals and refreshments; supplies for Blue Sky and JAL-DFS shops; aircraft fuel components, cabin services and in-flight duty-free. JALUX merged with JAS Trading on 1 January 2004, to unify support operations for the JAL group.

JAL Cargo is the brand of the airline group's freight service and is a member of the WOW cargo alliance with the following products, J Speed, General Cargo and Dangerous Goods. In the fiscal year ended 31 March 2009, the Cargo division carried 500,779 tonnes of freight domestically and 627,213 tonnes of freight internationally.

On 1 April 2011, the airline changed its trade name from Japan Airlines International Co., Ltd to Japan Airlines Co., Ltd.

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