JAS to ax or restructure unprofitable routes

As part of its mid-term management plan, Japan Air System Co., will restructure some 20 domestic routes running in the red, including the suspension of some services, JAS President Hiromi Funabiki said on June 11.

Although the airline currently operates 100 routes, only a third are profitable and the rest incur losses, putting financial pressure on the company’s management, he said. “We will focus on making profits on each route,” Funabiki said. “It is not acceptable that profitable routes cover the losses incurred by unprofitable routes.”

The restructuring measures include suspending services, running seasonal operations, using smaller aircraft and decreasing the number of flights, he said. The airline will target unprofitable routes that cannot even cover direct operational costs, such as fuel and landing fees, Funabiki said.

He declined to identify which routes will be affected by the restructuring efforts, citing that coordination with local communities is needed for such actions. Among other measures, the airline will have its affiliated firms operate domestic routes that link regional cities, and will raise fares to reflect increased costs for fuel and maintenance stemming from oil price rises and the lower yen.