Japan Airlines (JAL) considers setting up budget airline

Category Business | Tuesday, August 31st, 2010

Japan Airlines may use part of a Y350bn ($4bn) capital injection from the Japanese government to set up a budget airline as it seeks to rebuild its business after declaring bankruptcy in January.

Masaru Onishi, JAL president, said on Tuesday the former state-owned airline, which is burdened with some of the industry’s highest operating expenses, was considering launching a “Japanese-style low-cost carrier” to cater to frugal leisure travellers.
“There is a lot of interest in low-cost carriers and we will research the issue and decide how to proceed,” he said.

JAL’s local rival All Nippon Airways is also considering setting up a low-cost airline, possibly in partnership with investment funds or another Asian carrier, to help it ward off challenges from cheaper regional competitors.

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