Japan Airlines and Japan Air System may cut their airfares on domestic routes by some 10 percent on average after integrating their operations in October, company sources said Wednesday.
The proposed cut forms part of a merger plan the two airlines submitted Tuesday to the Fair Trade Commission after revising their original scheme, the sources said.
The companies have yet to decide when to cut the airfares, but any reduction is likely to intensify price-competition with All Nippon Airways, the nation’s only other big airline.
In January, JAL and JAS said they will set up a holding company, Japan Airlines System, on Oct. 2, and merge their operations into three group firms by spring 2004.
But the antimonopoly watchdog on March 15 told them the original merger plan was anticompetitive as it would cut the number of major players in the domestic market to two.
JAL and JAS hope the FTC will approve the merger plan, including the airfare cut, which would be made possible via the use of around 73 billion yen in savings generated by the merger, the sources said.
The revised plan includes a set of remedial measures to promote competition in the airline industry.
These include giving up some landing slots at Tokyo’s Haneda airport and offering airport facilities to other carriers, they said.
The FTC is expected to approve the revised merger plan later this week, according to the sources.
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