DOHA, QATAR – Japan Airlines Co. said the release of new operating slots at Tokyo’s Haneda airport has created a capacity glut likely to persist for another 18 months, weighing on average fares and earnings.
“There was a large increase in the supply, and demand has not kept up at this point in time,” JAL Chairman Masaru Onishi said Monday during an interview in Qatar. “The same happened for international flights. Hence we believe that for this fiscal year, business will be a little difficult for us.”
Excess flights at Haneda, which handles the bulk of Japan’s domestic and short-haul services, come as JAL seeks to improve its financial position after emerging from bankruptcy protection in 2011. The airline is “financially healthy” but will focus on improving its cash position and credit rating before boosting shareholder returns, Onishi said.
“When we are strong enough financially, we may increase dividends,” he said at a Oneworld alliance event during the International Air Transport Association annual meeting in Doha.
JAL is evaluating network expansion as it continues to take deliveries of the Boeing 787, which has been a “game-changer” for the carrier, Onishi said.
The company will begin considering a requirement for smaller regional jets and propeller-drive planes in the “near future,” he said. JAL has about 10 Saab AB 340B turboprops.
ANA Holdings Inc. President Shinichiro Ito, who is also in Doha, said his major concern is the yen’s loss in value against the dollar, a trend that has increased the relative cost of both jet fuel and aircraft, which are priced in U.S. currency.
One dollar buys about ¥102 based on Monday’s prices, compared with ¥77.13 as of Sept. 13, 2012, the Japanese currency’s strongest level in the past two years.
ANA international leader
All Nippon Airways in April topped Japan Airlines, in terms of monthly international capacity, for the first time since ANA began regular international passenger flights in 1986.
ANA’s capacity in April totaled 4.05 billion available seat kilometers, up 27.2 percent from a year earlier. JAL registered 3.84 billion available seat kilometers, up 3.7 percent.
In March, ANA was awarded 11 international takeoff and landing slots at Tokyo’s Haneda airport, while JAL was given only five. ANA used the new slots to begin flights to Vancouver and Munich.
But ANA’s use of its capacity, called the passenger load factor, dropped to 65.4 percent in April, down from 66.5 percent a year before. At JAL, the passenger load factor stood at 70.9 percent in April.