JAL to shut down all-cargo group, but bellyhold still available

JAPAN Airlines Corp (JAL), Asia's biggest airline by sales, has announced it will suspend scheduled freighter flights by the end of October but continue to offer passenger bellyhold capacity, reports Dow Jones.

JAL said its passenger fleet offers three times the cargo capacity of its freighter fleet and will be able to meet shipper needs throughout its international network, but there are large loads that such planes will not be able to handle, reported American Shipper, adding that the airline has 508 weekly passenger flights.

JAL, said the new cargo business structure will help restore profitability. JAL, which first launched its first freighter flight in 1959 linking Tokyo and San Francisco, has provided air cargo services using both passenger flights and freight flights for five decades.

"It is surprising that the largest airline in Asia and the dominant carrier in what is the world's second largest economy, and one based on export manufacturing, can't maintain a viable freighter business," said David Hoppin, managing director at transport and logistics consultancy MergeGlobal.

JAL, which is downsizing after entering bankruptcy in January, said the decision means JAL's fleet of six 747 freighters and three 767 wide-body freighters will be sold or parked. Two other cargo planes are in storage, according to information from market research firm Ascend Worldwide.

JAL's overall financial position - in the last nine months of 2009, the carrier lost US$2 billion - compelled the move despite the recent Asia-led resurgence in the air cargo market, reported the Seattle Times.

Bob Dahl, managing director of Seattle-based consultancy Air Cargo Management Group, said cargo traffic out of Hong Kong, for example, climbed back to pre-downturn 2008 levels in the first two months of this year.

"The Asia air cargo market has recovered," he said, but because of the two-year global economic slump, there are still 40 large freighters parked and inactive by the end of 2009.

The decision to eliminate freighter service after 50 years follows news early this month that JAL and Nippon Yusen Kabushiki Kaisha, a conglomerate that includes ocean cargo carrier NYK Line, abandoned plans to merge JAL Cargo and Nippon Cargo Airlines.

JAL's termination also marks the end of JAL service at Anchorage, Alaska, which has been a point on JAL's route map since the reorganised carrier began international operations in 1953, reports Examiner.com.

JAL service at Anchorage flourished because of Soviet airspace restrictions, forcing flights between Europe and Asia to stop in Alaska, once known as the "Air Crossroads of the World" for refuelling.

But the Soviet collapse brought an end to most international passenger flight to Anchorage, including JAL's. Since then, however, Anchorage has experienced a resurgence as a refuelling and crew change stop for freighters, which operated fuller and more profitably with a refuelling stop between Asia and North America or Europe, the report said.

(Source: www.schednet.com)