Japan Airlines Corp. will accelerate a drastic rethink of its international-flight operations to cut costs on the back of higher crude oil prices, according to President Toshiyuki Shinmachi.
"We will accelerate a review of routes with low profitability and leave no stone unturned," Shinmachi said in an interview late last week.
"Flights to resorts, such as Saipan, are on the table for review," he said. The review of JAL's international-route plan after October is focused on flights to resorts, which are suffering from a fall in revenue per customer.
During the review, to be concluded by the end of the month, the firm will consider whether to end flights with low profitability or shift to charter services, he said.
JAL has a high ratio of international flights and thus the airline is more vulnerable to international conditions, such as a rise in crude oil prices and terrorist acts.
Shinmachi expressed concern over higher crude oil prices, saying the airline faces an increase in costs of more than 40 billion yen if oil prices remain at the current level.
"We integrated with Japan Air System Co. partly with the aim of making ourselves invulnerable to external factors, but many changes have occurred that have countered the effects of integration," he said.
JAL and JAS integrated their operations in April 2004.
On the safety blunders recently embroiling the carrier, Shinmachi said, "There was distance between staff and management in the process of management integration, and communication between the divisions was insufficient."