JAL, JAS unite as No. 6 carrier

Japan Airlines System hopes to get a wing up on ANA

Japan Airlines and Japan Air System integrated their operations Wednesday under a new holding company dubbed Japan Airlines System Corp., becoming the sixth-largest airline group in the world in terms of passenger miles.

JAL President Isao Kaneko became president and chief executive officer of the new holding company the same day.

The presidents of both carriers greeted passengers at boarding gates at Tokyo’s Haneda airport, passing out commemorative gifts. They were assisted by flight attendants decked out in throwback uniforms.

“We will work so that we do not lose to the speed of the times, nor forget the need to give (the job) our best,” Kaneko said.

Japan Airlines System was listed Tuesday on the first sections of the Tokyo Stock Exchange, the Osaka Securities Exchange and the Nagoya Stock Exchange.

The holding company is capitalized at 100 billion yen and has a workforce of 122. The Mizuho Financial Group is its largest stockholder, followed by Tokyu Corp., which was the top JAS shareholder.

JAL has a large network of international routes but has not done well in the domestic market, where rival All Nippon Airways has a dominant share.

By integrating its operations with JAS, which has a large domestic web, JAL hopes to compete domestically with ANA on an equal footing and boost its profits.

In the first phase of their management integration, JAL and JAS will maintain their current flight services, becoming subsidiaries of Japan Airlines System.

But JAS Sales, a new company formed under the new holding firm, has taken over their ticket sales.

The carriers have also set up a system that allows customers to book flights on either airline at their reservation centers.

In the second integration phase, beginning in April 2004, the two companies will completely merge their operations into three group firms.

These will be Japan Airlines International Co., which will run international flights; Japan Airlines Domestic Co., which will operate domestic flights; and Japan Airlines Cargo Co.

By then, the carriers hope to have integrated their computer systems for handling seat reservations and issuing tickets.