MIAMI – Japan Airlines (JL) will retire up to 24 of its Boeing 777 aircraft over the next three years, as it battles the coronavirus crisis.
According to flightglobal.com, JL states that it will retire 11 777-200ER used in its international network by March 2021. An unspecified number will move to domestic operations. It will also retire all 13 777s used on domestic flights, nine 777-200s, and four 777-300s, by March 2023.
Finally, JL will also return five leased 737-800s to lessors by the first half of fiscal 2022, which begins on 1 April 2022. Cirium fleet data indicates the carrier currently has a fleet of 48 737s.
A Smaller Fleet by 2022
By the end of the 2022 fiscal year, JAL will have a smaller fleet of international aircraft. Its domestic fleet will remain about the same size. JL has 25 Airbus A350s on order that will serve in-country routes.
The airline’s announcement comes as it falls into the red for the six months ending September 30. It also comes days after All Nippon Airways’ (NH) announced its move to shrink its fleet size. ANA announced that it will retire 35 aircraft — including 22 777s — this year, an increase of 28 from its original plan.
Moving Some Fleet to Zipair
The airline is also mulling a transfer of more aircraft to its newly-launched low-cost subsidiary Zipair Tokyo (ZG), as part of a broader strategy to strengthen its low-cost carrier business. It says it will transfer four more aircraft to ZG, over an undisclosed time period, adding that “further additions could be considered”. Zipair Tokyo operates a fleet of two 787-8s transferred from JL’s fleet.
Preparations for ZG flights to Honolulu are also “almost complete”, says JL, indicating possible new destinations.
JAL established the low-cost Zipair unit in 2018, intending to launch passenger flights in May to Bangkok and Seoul. However, plans were scuttled due to the pandemic. Zipair Tokyo recently launched its first passenger flight to Seoul Incheon on October 16, serving the South Korean capital twice weekly from its Tokyo Narita base.
JAL also shed light on how it will position its various low-cost offerings, which also include joint venture carriers Jetstar Japan and Spring Japan. Zipair Tokyo will target the low-cost, medium to long-haul and high-growth markets. Jetstar Japan (JQ), meanwhile, will target domestic operations, while Spring Japan will focus on the Chinese market.
JL Revenues Drop in the First Half
For the six months ended 30 September, JL reported an operating loss of Y219 billion (US$2.1 billion), reversing the operating profit of Y80.3 billion (US$770 million) it made last year.
Revenue for the period plunged 74% to Y194 billion (US$1.84 billion), led by a 97% fall in international passenger revenue. A rise in cargo revenue of 18% year on year helped offset the overall revenue decline.
Airline expenses shrank 37.5% to Y419 billion (US$4.0 billion). Still, JL reported a net loss for the period of Y161 billion (US$1.54 billion), a contrast to the Y54 billion (US$520 million) profit it made last year.
For the period, JL carried only 112,000 international passengers, nearly 97% lower year on year. International ASKs shrank 88%, while RPKs plunged 97%, leading to a load factor of just 20.8%.
On the domestic front, JL carried 4.6 million passengers for the period, a 76% year-on-year decline. Domestic ASKs fell 51%, while RPKs declined 76%. JL notes that domestic demand has gradually recovered since September, after a dip in August owing to a resurgence in cases in Japan.
Featured image: Japan airlines Boeing 777. Photo: Luca FLores