• Kyodo News


The state-backed body tasked with rehabilitating Japan Airlines is looking to set up a budget carrier in the JAL group that would fly from two domestic airports to popular tourist locales in and outside Japan, sources said Wednesday.

Enterprise Turnaround Initiative Corp. of Japan would aim toward starting the discount flights by March 2013, offering low fares while saving costs, the sources said.

The turnaround body is considering operating discount routes from Kansai International Airport in Osaka and Chubu International Airport near Nagoya to popular tourist spots in Asia and domestic locations, including Hokkaido and Okinawa, the sources said.

ETIC is compiling a court-led rehabilitation plan for JAL that is likely to involve the elimination of 14 international and 12 domestic routes.

Meanwhile, Kazuo Inamori, honorary chairman and founder of Kyocera Corp., accepted Wednesday the government’s offer to be JAL’s chief executive officer.

Prime Minister Yukio Hatoyama met Inamori, 77, and asked to him to take up the position the same day. Inamori will work unpaid three to four days a week at JAL’s office, sources said.

“After listening to what they had to say, I told them that JAL’s restructuring is possible if the plan is implemented as it is,” Inamori told reporters earlier in the day.

In addition to restructuring, sources said ETIC is also preparing measures to make sure JAL can stay competitive amid the growing popularity of budget airlines worldwide.

Also to help save costs, ETIC is considering relocating JAL’s headquarters from Higashi Shinagawa in Tokyo to a site closer to Haneda airport.

Under study is a plan to set up the proposed low-cost carrier with other firms, including some from outside the airline business.

The budget airline might take over some routes linking the Kansai and Chubu airports with popular domestic and overseas tourist destinations, which are now operated by a group firm, JAL Express Co.

The proposed discount airline would reduce costs by trimming the size of flight crews, charging for drinks and offering only economy-class seats on domestic flights.

Also under consideration is selling some of the shares JAL holds in its group firms — Japan Trans Ocean Air Co. and Ryukyu Air Commuter Co., which serve Japan’s remote islands — to local authorities. If the plan goes through, the two airlines would no longer be JAL’s consolidated subsidiaries.

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