Japan Airlines System Corp. plans to postpone its cargo operation spinoff eyed for April 2004 as the move would make it difficult for the carrier to effectively allocate crews for the firm's overall operations, company sources said Thursday.
The holding company of Japan Airlines and Japan Air System is expected to incorporate the plan into a midterm business blueprint to be released in March, the sources said.
Japan Airlines System initially planned to reorganize itself in April 2004 into three units -- the first handling international flights, the second in charge of domestic flights and the third for cargo flights.
But with a postponement, the firm would reorganize itself into one unit in charge of domestic flights and another for international flights, with both handling cargo.
The company became concerned it might incur higher costs if it fails to cope flexibly to ensure a stable supply of crew members capable of handling new types of aircraft, the sources said.
Japan Airlines System also suspected it might face restrictions in setting up flight routes if it spins off its cargo division, citing the Japan-U.S. aviation accord limiting the number of airlines that can freely set routes and flight numbers between the two countries, they said.
JAL and JAS integrated their management in October under Japan Airlines System, becoming the sixth-largest airline group in the world in terms of passenger miles.
By integrating its operations with JAS, which has an extensive domestic network, JAL hopes to boost its profits and level the playing field with All Nippon Airways in terms of domestic routes.
JAL has a large network of international routes but has not done well in the domestic market, where ANA has a dominant share.