ANA, JAL Rushing To Clip Wings At Kansai International Airport

TOKYO (Nikkei)--All Nippon Airways Co. and Japan Airlines Corp. plan further cuts to unprofitable routes at Kansai International Airport, raising concerns about the impact to the operator of the western Japan hub, The Nikkei learned Monday.

JAL will terminate two Chinese routes connecting the Osaka airport with Dalian and Hangzhou, which the airline serves once a day. And ANA this November will end service to Kochi, Matsuyama and Kagoshima lines and cut flights to Fukuoka by half. It now has two flights daily to Kochi and Matsuyama and four to Fukuoka.

Japan's two leading carriers had already streamlined flights at the airport last fall and again this past spring.

The airlines will soon start full-fledged talks with the Transport Ministry, the Osaka prefectural government, Kansai International Airport Co. and other parties that might be affected by the changes.

JAL, which will be placed under the ministry's supervision in exchange for receiving a government-guaranteed loan, is considering deeper cutbacks of domestic flights at the international airport.

Both carriers expect their incomes to improve by about 10 billion yen through these steps.

And while they risk strong local opposition, with earnings deteriorating and passenger numbers declining, "we can't avoid these measures to stabilize operations," says a JAL official.

They are considering scaling back services at other airports as well, but addressing the red ink at Kansai airport is the priority at this time.

Kansai saw a series of major cutbacks in the second half of fiscal 2008. JAL discontinued five domestic flights, while ANA pulled out of the Guam route. And since the start of this fiscal year, JAL has already decided to end five domestic routes and its London service.

Kansai International Airport served 34 domestic cities in 1996, but ANA's planned termination of three domestic routes will bring this to just eight.

The Osaka airport aims to have 114,000 arrivals and departures this fiscal year, down 11% from fiscal 2008, but this goal appears to have grown more difficult to achieve.

(The Nikkei July 7 morning edition)