The Fair Trade Commission has apparently thrown a wrench into plans by Japan Airlines System Corp. to break a promise that led to its recent merger and raise domestic fares.
The holding company of Japan Airlines and Japan Air System had planned to raise those fares in June but now hopes to do so in July, company sources said Friday.
The carrier says the hikes are necessary due to the war's expected impact on fuel prices and demand. But the FTC has reportedly disapproved the plan, saying the war in Iraq has yet to hit the airlines in a way that justifies higher fares.
The carrier hopes to restart negotiations with the FTC and raise prices in July.
The postponement comes after the company put off an initial price hike plan scheduled for April due to opposition from the Ministry of Land, Infrastructure and Transport, and other concerned bodies.
Japan Airlines System cut regular airfares for domestic flights by 10 percent last October when it was established through the integration of the management of JAL and JAS.
But with the number of passengers falling particularly on international flights -- amid intensifying tension over the Iraq war, and with fuel prices rising, its business performance has been deteriorating.
As a result, the company intended to raise airfares to the previous level despite a promise it made not to raise fares for at least three years after the integration.
On Thursday, Japan Airlines System and All Nippon Airways separately announced plans to raise international airfares by 3 percent from April 15.