JAL To Buy 18 Smaller Aircraft

TOKYO (Nikkei)--Japan Airlines Corp. plans to purchase 18 small and midsize aircraft in the year ending March 2010 as it hurries to boost efficiency by reducing the size of the airplanes in its fleet.

JAL will purchase nine Boeing Co. 737s, which seat 144-165 passengers, two 767s, which seat 207-261 passengers, three 777s, with room for 245-500 passengers, and four 76-passenger regional jets from Brazil's Embraer SA. The total purchase price is expected to exceed 180 billion yen, a portion of which has already been paid.

Although capital spending is being reduced or postponed companywide, cutbacks in aircraft purchases are being kept to a minimum because the company feels that is the driver of competitiveness.

Operation of larger aircraft such as 747-400 jumbo jets will be reduced and the ratio of smaller aircraft on international routes will be raised to 56% by the end of the current fiscal year from around 50% at present. For domestic routes, the company is using regional jets for regional flights with few passengers.

With a second straight net loss projected this fiscal year due to sluggish travel demand, JAL is working to make the loss smaller through efficient management of its aircraft fleet.

(The Nikkei Business Daily April 28 edition)