Ten things you may not have known about Japan’s newest and, um, peachiest airline

  1. Its name is Peach. Seriously.
  2. It is a joint venture between All Nippon Airways and First Eastern Investment Group, a Hong Kong private equity firm.
  3. Its livery designers apparently got their inspiration from the Barbie Jet.
  4. “Peach” allegedly stands for Pan-Asian, Energetic, Affordable, Cute & Cool and Happy.
  5. As many native English speakers instantly noticed, “Peach” is an anagram for “cheap.”
  6. Peach claims to be Japan’s first low-cost carrier. Obviously, this is a blatant lie since Skymark and Air Do both preceded them and are both still flying.
  7. They will be based at Kansai Airport in Osaka, where only the cheap survive.
  8. Peach’s corporate parent, A&F Aviation, was recruiting operations personnel on LinkedIn’s job board a few months ago and didn’t seem to care that much about language ability. Their staff roster must look pretty interesting by now.
  9. Peach is not the first fruit-themed airline. There is an airline in South Africa called Mango, and the US has both Berry and Lime. That said, Peach is probably the fruitiest of them all.
  10. Peach is so cheap that they didn’t even have chairs at their first presser.

As an aviation geek, I am morbidly fascinated…

Japan air travel update

I am flying out of Tokyo tonight to spend the holiday weekend in Hawaii and try to decompress from all the nonsense surrounding the disaster situation here.

Narita Airport is operating fairly normally — it has its own generators which will keep it online through the surrounding blackouts — but most European airlines have dramatically altered their flying patterns, adding stops in Seoul, Beijing or Hong Kong. Lufthansa has stopped serving Tokyo entirely. The reason is that foreign flight crews do not want to spend a night in Narita when there is a nuclear meltdown raging just up the road, so they are instead overnighting elsewhere in Asia and operating day trips in and out of Tokyo from there.

From online fora, I have also discovered that American flight crews are agitating. They are not only concerned about radiation, but are also protesting that aftershocks disturb their sleep (posing safety concerns), and that the periodic blackouts and runs on toilet paper are making their layovers unnecessarily rough. The big problem here is that unlike the European airlines, Delta, American and United-Continental really need to keep operating direct flights to Narita, as they route almost all US-to-Asia passengers through Narita (Delta to its own connecting flights, other airlines to local JV partners’ connecting flights) and would be forced to accommodate connecting passengers on non-affiliated airlines at considerable expense if their own flights were diverted to other Asian airports.

Most governments are currently advising against non-essential travel to Japan, and I second this recommendation; there are too many variables that could combine to make Japan travel a living hell. If you really need to come here for whatever reason, plan to fly into Nagoya or Kansai.

The Haneda trick

Haneda Airport has been all over the Japanese news lately, so it’s about time that I write some more about it.

The new international terminal opened today, and long-haul flights will commence at the end of this month. The catch is that they will all have to operate between 10 PM and 7 AM, the hours when Narita Airport is closed. Only flights to certain cities in East Asia are allowed to operate during the day. This is commonly interpreted as a compromise to keep Narita traffic up, but there is a more subtle and less reported effect of the schedule: it helps Japanese airlines and screws over foreign airlines. Here’s why.

Within this rule, the most attractive schedule from a passenger’s perspective is to leave Haneda between 10 PM and 1 AM, and to arrive at Haneda as close to 7 AM as possible. If you leave Haneda in the early morning hours, you either have to get there on the last train the evening before (requiring a wait) or take a car or taxi in the wee hours of the night (expensive). If you land at Haneda after 10 PM, you have to hustle to get ground transportation to your final destination in Tokyo.

It’s easy for JAL and ANA to offer such schedules because they have operations at Haneda during the day. If a JAL plane comes in from Europe at 6 AM, it can be cleaned, refueled and sent on a round trip to Seoul, Beijing or Shanghai, and still get back in plenty of time to take people overseas at 10 PM. On the other hand, if a foreign plane flies in at 6 AM, they have to sit at Haneda for fifteen hours until they can fly again. The best compromise that non-Japanese carriers can come up with is to have their flights arrive at Haneda around 10:30 and depart around 6:30 — meaning that most Tokyoites will have to get up very early and catch the first train of the morning, then catch the last train home after their trip. A couple have managed to put together flight schedules that leave Haneda around midnight, but this is not always realistic because of time zones and the longer turn-around times for long-haul aircraft.

JAL and ANA will run their first long-haul flights on October 31, but American, Delta, Air Canada and British Airways won’t start flights until next year, and might even decide that Haneda isn’t worth it unless the hours are relaxed further. The only non-Asian carrier that will serve Haneda this year is Hawaiian Airlines, who will bring their daily flight into Haneda right at 10 pm, then turn it around back to Honolulu after midnight. They can get away with this because Honolulu is only a few hours ahead of Tokyo (minus a day), so the midnight departure translates to a lunch arrival, and the 10 pm return arrival translates into an afternoon return departure — both good timings for vacationers. On the other hand, American’s proposed HND-JFK flight is horribly timed, leaving HND around 6 AM and arriving at JFK around the same time, virtually guaranteeing that every passenger on it will be jet-lagged out of their mind for a week. But they don’t have much of a choice.

The new division of duties between the airports won’t be sustainable, and I believe Kasumigaseki will eventually open up HND to flights around the clock — in which case Tokyo’s airport situation will eventually look like London’s. Haneda will be the equivalent of Heathrow: close-in, popular, charging a premium, and a key intercontinental hub. Narita will be the equivalent of Gatwick or Stansted: a haven for cheap flights to holiday destinations, mainly serving Tokyo locals.

Skymark vs. the SDF

The new airport in Ibaraki Prefecture just lost its only domestic route, though it will still have a flight to Korea.

There were reasons to expect this. The airport is far from Tokyo, even farther than Narita, and it has no rail service. It is only particularly convenient for people in Mito, Tsukuba and other cities in the immediate surroundings. (More on this at CNNGo and Yen for Living.)

But economics didn’t kill Skymark Airlines’ Ibaraki-Kobe route: instead, the neighbors killed it. Ibaraki Airport was originally built as an Air Self-Defense Force base, and it still houses units of fighter defense jets and military civil defense transport planes. This is not really a unique situation to Ibaraki: Itami, Komaki and New Chitose Airports all have SDF units on-site, and Misawa Airport shares its runways with the U.S. Air Force. These airports manage to keep a balance between civilian and defense traffic, but the officials in Ibaraki were apparently less cooperative.

Yomiuri (English):

It’s possible the ASDF could ask us to suspend our flights when they are holding a troop inspection ceremony. We are therefore unable to conduct this service on a regular basis,” a Skymark spokesperson said.

The cancellation has shocked local officials. “I am very surprised. I will ask the officials concerned to fine-tune any differences as soon as possible, and give top priority to passenger convenience,” Ibaraki Gov. Masaru Hashimoto said late Thursday.

Toyo Keizai (Japanese):

Skymark management explained the cause of the service cancellation: “There is a need for consideration for the Air Self-Defense Forces in excess of what was expected, and this harms our ability to provide steady service.” They have also indicated that there is a possibility of resuming service if the situation improves, but the relationship with the SDF was expected at the time the service began, and some related parties are calling [Skymark] irresponsible.

Load factors on Skymark’s Ibaraki-Kobe route are high, exceeding 75%, but the route is running in the red when maintenance and other operating costs are included. Skymark aimed to make the route profitable by providing service three or more times per day in the future, instead of the current single daily round trip, but apparently determined that such a schedule would be difficult to arrange because of the SDF relationship.

Asiana Airlines are maintaining daily flights between Ibaraki and Seoul, so the airport is not totally a ghost town. Assuming passengers can get there, it’s actually great for ultra-cheap flying because of its low construction budget and lack of frills. The terminal is extremely compact (it doesn’t even have jet bridges to the planes) and on-site parking is free.

Things which Japan does not monopolize, despite conventional wisdom to the contrary

  1. Upskirt photography: Police in upstate New York recently ran a sting operation to catch an upskirt photographer in a clothing store, which led to the unsuspecting victim suing the store.
  2. Expensive airports that nobody goes to: “Local officials were so confident that tourists would flock to this beautiful, mountainous county in southwestern China that they made the terminal big enough to accommodate 220,000 passengers annually, and built a runway capable of handling a 140-seat Boeing 737. But only a few charters and budget carriers have established service here. A grand total of 151 people flew in and out of Libo last year.
  3. Whaling: See this piece in The Economist, then Wikipedia for the breakdown.

Did I miss anything?

What to do with an obsolete airport

Itami Airport

The media is reporting that Osaka governor Toru Hashimoto is thinking of demolishing Itami Airport and building an international academic village on the property where everybody speaks English. People are already raising hell about this idea over at Debito’s blog. I think it’s a silly idea (as presented, anyway) and will never make it out of committee, but the issue of what to do with Itami is still pertinent, as Osaka really doesn’t need three airports.

What can you do with an airport you don’t need any more? Here are five possibly pertinent examples:

  1. Kai Tak Airport, Hong Kong
    Kai Tak has many parallels to Itami. It was mostly built by the Japanese military (during their wartime occupation of Hong Kong), and it occupied a prime central location in huge city that grew increasingly dense over the years. As a result of the latter, the airport was cramped, overcrowded and hair-raisingly difficult to get into: aircraft landing in one direction had to approach the runway at a right angle, then make a hairpin turn just above the ground to touch down (video). Kai Tak was replaced by a somewhat Kansai-like airport, the current Hong Kong International Airport, in 1998, and was promptly closed. Since then, the site has been more or less empty despite constantly-shifting plans to build hotels, cruise piers and a giant stadium there.
  2. Stapleton Airport, Denver
    In its heyday, Stapleton was one of the busiest airports in the world, serving as a cross-country hub for Continental Airlines and United Airlines. Like Itami, though, it was in the middle of a mostly residential area, which limited its growth potential and caused friction with residents over noise. In the early 90s, the federal government threw millions of dollars into an enormous new airport on the outskirts of the city, Denver International Airport, which is now the second-largest airport in the world. Stapleton was then closed down, and the site converted into a “new town” of 30,000 people.
    (Aside: I visited Denver last November, and the airport strikes me as totally ridiculous–you pass the sign that says “WELCOME TO DIA,” and the next sign says “TERMINALS – 15 MILES.” The largest airport in the world is in Dammam, Saudi Arabia and is larger than the entire country of Bahrain.)
  3. Hoover Field, Washington
    Hoover Field was the first airport in the capital of the United States, back in the earliest days of commercial aviation. It was built across the river from the city in Arlington, Virginia on the other side of the 14th Street Bridge. The site was incredibly cramped, though–most notably, there was a road running through the middle of the main runway, requiring railway crossing gates to be lowered whenever a plane took off or landed. The field was shut down around the start of World War II, when National Airport opened nearby, and the site was then used to build the Pentagon.
  4. Meigs Field, Chicago
    Meigs was a small airport on an artificial peninsula right on the lakefront of Chicago–essentially a miniature 1930’s version of Kansai Airport. It was most famous in its heyday for being the default starting location in Microsoft Flight Simulator. Mayor Richard Daley started campaigning in the early 90’s to convert the site into a giant park, and after a decade of bureaucratic stalling by Congress and the FAA, he took matters in his own hands and ordered the runway bulldozed into uselessness overnight. The site is now a lakefront park and was briefly being sold as a potential venue for the 2016 Olympics.
  5. Old Kitakyushu Airport, Kitakyushu
    This is probably the closest parallel in Japan to a potential Itami closing scenario. The old Kitakyushu Airport was a relatively small facility, with one runway and a handful of daily flights to Haneda Airport in Tokyo, using relatively small YS-11 prop planes, later replaced by faster but still small MD-80 jets. The airport was clearly a bit of joke even in the mid-70s, and so the local government commissioned a new, larger offshore airport nearby, which opened in 2006 (and, surprisingly enough, is still not all that popular). The site was initially envisioned as a new urban project, but there were no takers; economics finally came out victorious, and the site is now zoned for industrial use, housing a hospital and a couple of industrial production sites.

There is one fate which Osaka undoubtedly wants to avoid–the fate of Montreal. Montreal spent something like a billion dollars to build and expand a giant airport on the outskirts, Mirabel Airport, which would have been the largest in the world were it ever completed. Just like Osaka, Montreal projected that their old downtown airport, Dorval, would quickly become too small for demand, and they tried to lock international carriers into the more distant Mirabel in order to artificially boost its popularity despite stagnating overall demand. The result was that Montreal lost relevance as an air hub, since nobody wanted to connect between the airports, and the city was getting less internationally relevant anyway. Montreal eventually gave up on Mirabel and moved everything back to Dorval in the nineties, leaving their gleaming new airport as a gleaming white elephant plied only by a few cargo planes.

So what could Osaka do with Itami Airport’s site? As a former Itami resident (I had a host family there back during my first stay in Japan), I have some ideas of my own.

First of all, it would be great as a replacement for the rail freight yard in Umeda, which is a pretty wasteful use of downtown space. ITM is right next to a JR trunk line and could be connected fairly easily — it also isn’t far from the Sanyo Shinkansen, which could theoretically be used for some freight traffic in the future once everything goes maglev. Then the downtown space occupied by the current yard could be fully converted into residential or commercial buildings. (UR has actually already started this process on one side of the yard.) This would also fit in fairly well with the light industrial character of the immediately surrounding real estate.

If you want to get a bit more fantastic, how about a space elevator? Or perhaps a new central government location for some of those Tokyo-bound bureaucrats? (I already proposed a similar fate for KIX in comments to this post.) Perhaps the Defense Ministry could move out there and give up its nice space in Ichigaya, though I’m sure the more lefty locals wouldn’t like that plan.

US infrastructure is pathetic

As a simple reminder, look at the plans for the rail line being built to Taipei’s Taoyuan International Airport (former Chiang Kai Shek Airport).

Travelers leaving from Taiwan Taoyuan International Airport will be able to check their luggage in at Taipei Railway Station before boarding the Airport Rail, the Bureau of High Speed Rail said yesterday.

“When the Airport Rail is launched in 2014, passengers can check in and get their boarding passes in the city first,” Bureau Director-General Chu Shu (朱旭) said. “The Taoyuan airport will be the fourth system in the world to offer in-town check-in service, following airports in Kuala Lumpar, Hong Kong and Bangkok.”

Even in cities that have a half-way decent rail system, most airports in the US don’t even have a rail connection. NYC’s JFK Airport has the so-called Airtrain, but after trying it once I suspect it might be faster to walk. There is also some talk of extending the PATH 2 miles so that it connects Manhattan directly to Newark Airport, with 24 hour access, which would be a huge improvement. But I can’t even imagine any place in the US putting together a baggage check-in service on the other side of an express airport rail. America was once the world leader in infrastructure, and now look at the list of cities in that article that have not just better airports, but better airports AND better airport rails! Don’t get me wrong, I’m very happy to see the rest of the world catch up, but I’m disgusted that 21st America is making so little investment in similar upgrades. China’s insane empty city aside, they are also pumping $200 billion into high speed rail infrastructure. The United States has only about 10% of that figure promised.

Japan’s airliner industry

In the last week or so, there has been some buzz on the NBR mailing list about Japan’s airliner industry. Many very educated people seem completely unaware that Japan has built whole commercial planes before, and that it is still deeply involved in this business despite not having a strong brand in the aircraft business. For regional pundits who are newbies to the aerospace industry, here’s a brief history of Japan’s forays into my favorite line of business.

The Imperial days

Before and during World War II, various Japanese firms built a variety of propeller-driven planes which were used for both civilian and military transport purposes. Many of these models were based on, or provided the basis for, Imperial Army and Navy bomber airframes. Wikipedia has a good list of these planes in its article on Imperial Japanese Airways, the old state-sponsored airline. I particularly like the Kawanishi H6K, a flying boat which was used for flights between Japan and its South Pacific mandate. Flying boats are awesome.

Besides unique designs like the H6K, there were also Japanese planes based on American or European designs; in fact, the Douglas Aircraft Company was granting production licenses to Japanese firms as late as 1938. Throughout the Pacific War, the Japanese forces were flying transport planes almost indistinguishable from parallel models in the Allied forces’ fleet.

After Japan lost the war, the American occupation forces banned Japanese firms from developing or building aircraft, and confiscated all the related technical materials they could find. The demands of the Korean War, however, quickly revitalized the aircraft servicing industry in Japan, as the US needed skilled workers to fix its fighters and bombers at Japanese bases. Japanese aviation resumed in earnest with the peace treaty of 1952, which removed some of the restrictions and allowed scheduled domestic flying to resume.

The YS-11

In 1956, when the aircraft production ban was completely lifted, the Ministry of International Trade and Industry immediately made it a priority to develop a home-grown replacement for the war-era planes then flying throughout Japan. They negotiated with the Finance Ministry and Transport Ministry to come up with a production budget and implementation plan, and in 1957 secured funding to set up a Transport Aircraft Design Research Association (輸送機設計研究協会 Yusōki sekkei kenkyū kyōkai) based at the University of Tokyo, overseen by MITI and a consortium of domestic manufacturers.

The first initials of the Association’s Japanese name, “YS,” were applied to the name of their final aircraft design, the YS-11. With mock-ups prepared and the design ready for production, the Association turned over control to a newly-formed parastatal Nippon Aircraft Manufacturing Corporation (日本航空機製造) or “NAMC,” comprised mainly of staff seconded from the major keiretsu manufacturers.¹

The first YS-11 rolled out in 1962 and represented a major advance in Japanese aircraft-building technology.

There was still work to be done, though. Although most production took place in Japan and was overseen by Japanese firms, Japan did not have the technical capability to make the airframe materials or engines for a modern aircraft, and ended up acquiring these parts from Alcoa and Rolls-Royce respectively.

Still, the YS-11 was a pretty solid aircraft, seating 64 passengers with a cruise speed around 650 km/h. Although most found themselves on regional flights within Japan, Japan’s neighboring countries also bought many of the type. Piedmont Airlines flew YS-11s around the southern United States for a while, and Olympic Airways operated the type around Greece. Having made some return on the government’s investment (though not enough to turn a profit), NAMC set its sights on more advanced planes which never saw the light of day.

The YS-33

In the mid-1960s, NAMC got cocky and decided that it would try to clone the McDonnell Douglas DC-10 widebody trijet, which was one of the most popular airliner models at the time despite an array of safety issues. The initial plan called for three models seating 100 to 150 passengers, but by 1970 it was clear that the market was demanding something more in the range of 200 to 250 passengers. Planned development costs skyrocketed from 15 billion yen to 100 billion yen as the plan got bigger and more technically complicated.

NAMC realized that the government simply could not afford to home-grow an entire jumbo jet, so the YS-33 (alternatively known as the “YX”) never made it past badly-drawn concept art.

In 1971, NAMC shut down its production and design departments, effectively becoming a mere servicer for the YS-11. The company wound down its operations over ensuing years and finally closed in 1983.

The Boeing cooperation era

Around 1970, the global airline industry was suffering from a glut of overcapacity and rising fuel prices, and was shifting its demand to more efficient aircraft. Every major aircraft manufacturer was planning a widebody twinjet at the time: two-engine DC-10s and L-1011s were on the table, as well as the first Airbus (now known as the A300) and a Boeing project tentatively called the “7X7.”

The key Japanese aerospace companies, led by Mitsubishi Heavy Industries, Kawasaki Heavy Industries and Fuji Heavy Industries, set up a Civil Transport Development Consortium (民間輸送機開発協会 or CTDC) in 1973. CTDC signed a memorandum of understanding with Boeing to become a technical development partner on its 7X7 project. The 7X7 turned into what is now the 767, and Japan ended up providing about 15% of each aircraft, including fuselage and wing sections. The aircraft flew for the first time in 1981.

Since then, Japan’s involvement in large Boeing aircraft has continued. The next Boeing widebody, the now-ubiquitous 777, rolled out for the first time in 1994 with even more Japanese components, comprising 21% of the aircraft. On Boeing’s latest large aircraft project, the ongoing and beleaguered 787, Japanese firms have been contracted to build most of the wings and part of the center fuselage, a total of 35% of the plane, and an extremely important 35% at that.

These huge components are currently built in Nagoya, loaded onto pregnant 747s, and flown across the Pacific to the final assembly line in South Carolina.

This is one reason why Boeing aircraft are ubiquitous in Japan. Airbus’s last sale here was an ANA order for five long-range A340s, which ANA cancelled after placing the first non-US order for 777s. ANA and JAL both later became launch customers for the 787, and ANA has extensively advertised the unprecedented Japanese-ness of Boeing’s upcoming model. But neither airline is particularly beholden to Boeing. In fact, production problems with the 787 led JAL to threaten shifting its order to Airbus.

Airbus, for its part, has not paid much attention to Japan. Instead, it has thrown its money and time into marketing in China, going so far as to open an entire assembly line in Tianjin for its popular A320 family of short-haul jets. Airbus planes are becoming more and more common throughout China, and it’s likely that China will use imported Airbus know-how to jump-start its own large aircraft industry.

Meanwhile, the Boeing partnership is the most successful segment of the Japanese civil aircraft industry today–at least much more successful than all the other money-losing projects to build a “truly Japanese” airliner.

The 7J7

CTDC also came up with a “YXX” plan, first proposed in 1979. They sought to develop a 100-seat jet plane that could be used for domestic routes to secondary cities. Based on their success with the Boeing partnership, CTDC decided to get Boeing on board, and thus was born the Boeing 7J7.

The 7J7 was a fairly unique design in that it would have used propfans for engines. These are basically very aerodynamic propellers mounted on jet engines. Propfans are very fuel-efficient compared to regular jet engines, and are capable of attaining similar speeds. However, propfans are also very loud, which makes propfan aircraft less attractive from a passenger’s standpoint.

In a high fuel price environment, and with the Iranian revolution casting fear in the hearts of fuel-hungry airlines, the propfan’s advantages were extremely attractive. By the mid-80s, though, most airlines were out of money and fuel prices were back to manageable levels. Boeing shelved the 7J7 plan and concentrated on making more efficient conventional jets.


Undaunted, the Japanese aerospace industry started chasing another pet aircraft project called the “YSX” in 1986. This aircraft was conceived as a direct replacement for the aging YS-11s, using a similar body with more modern wings and turboprop engines.

The YSX was a very underdeveloped plan which mainly fell victim to bad timing. By the late eighties, Japan was in the middle of an asset bubble while Europe and the US were facing a recession, and domestic manufacturing was no longer quite as competitive. Then came the Pan Am 103 disaster and the Gulf War, which tugged at the finances of already-strained airlines across the globe. By the time the industry picked back up in the mid-1990s, Japan was in a recession, US aircraft manufacturers were turning their attention to Chinese and Korean partnerships, and new types of aircraft were muscling small turboprops out of the market.

Mitsubishi Regional Jet

Today, propeller planes are becoming rarer and rarer. More airlines are switching to small jet aircraft for both short flights (where jets are more comfortable and almost as efficient) and long flights (where small jets can operate more convenient frequencies carrying less people on each flight). This is a market which Boeing and Airbus almost completely overlooked, and as a result, its leading players are now Bombardier of Canada and Embraer of Brazil, hardly countries one would expect to gain a strong toehold in the airliner market. Chinese, Russian and Ukrainian firms are also getting interested in this market segment.

In 2002, the newly-renamed Ministry of Economy, Trade and Industry decided that Japan should get in on the regional jet game, and started throwing billions of yen at a regional jet development project led by Mitsubishi Heavy Industries. The resulting design is called the Mitsubishi Regional Jet, and has managed to capture twenty-five orders from All Nippon Airways, though no other carriers have shown interest so far.

There seems to be little chance that MRJ will ever be profitable, as estimates show 600 airframes would have to be produced in order to yield a profit.

*** UPDATE: Just hours after this post came out, Trans States Airlines, a feeder contractor for a few major US airlines, ordered more than 100 MRJs.

Why can’t Japan build a jumbo jet?

The large-aircraft industry has long been supported by government funding. Boeing’s early money-winners, the 707 and 747 lines, started out as military transport planes and were later adapted for passenger service.² Airbus started out with a huge amount of funding by the British, French and West German governments as a way to jump-start the lagging European aerospace industry, and its parent company EADS is still subsidized to develop military aircraft for European forces. The other country to develop a significant big-plane industry was the Soviet Union in its heyday, and since the collapse of its command economy, its once-great aircraft manufacturers like Antonov and Ilyushin have been relegated to making poor copies of designs developed elsewhere.

While we all know Japan has no qualms about throwing tons of money at questionable business plans, the state’s obvious disadvantage here is Article 9. Strategic military infrastructure is legally out of the government’s reach, yet this is the sector which has the deepest technical nexus with large airliners. Without the prospect of national defense applications, there is much less economic rationale to invest in a whole production line for a plane with more than a hundred seats. It takes a hell of a lot of infrastructure, too: Boeing’s assembly line near Seattle is the largest building in the world, covering 400,000 square meters, and is mainly for assembly, not even producing all the huge components.³

Japan certainly has the native technical capability to put together a jumbo jet; the question is whether they could ever make money on it, and whether they could even put together a business plan which makes more sense than piggy-backing on a foreign producer.

* * *

¹ NAMC’s chief technician, Teruo Tojo, was a Mitsubishi Heavy Industries employee who also happened to be prime minister/war criminal Hideki Tojo’s second son.

² The 707 airframe is still in military use as an airborne command post and mid-air refueling platform; the 747 started out life as a bid for a giant military transport plane, and morphed into a giant passenger plane after Boeing’s bid lost to Lockheed’s (which became the C-5 Galaxy).

³ It also allegedly has the busiest Tully’s Coffee in the world.

Showdown at Narita: JAL vs. Ugly Americans vs. the DPJ

Various media sources have been reporting that JAL is now the subject of a tug-of-war between Delta and American Airlines, both of whom are interested in taking a large minority stake in Japan’s largest airline. (Korean Air and Air France have also popped up as “angel investors” in some reports.)

Let’s start with some background.

This is the ex-Narita route map of Delta Air Lines following its acquisition of Northwest. Delta is the #3 carrier at Narita with about 330 flights/week, compared to JAL’s 870 and ANA’s 500.

Northwest, whose operations account for the vast majority of Delta’s combined total, was the first airline to serve Japan following World War II. It provided the technical assistance which was necessary for JAL to start up in the early 1950s, and it has maintained an Asian mini-hub in Tokyo since the immediate postwar era. Delta came into the picture much later: they flew a very odd Portland-Nagoya route for a while in the 1980s, then pulled out of Japan completely, then came back in the 90s with a daily Atlanta flight. While Northwest was well-entrenched with travel agents and corporate travel desks, Delta relied more on feed from its US and Latin American route network out of Atlanta.

Now that Delta has absorbed Northwest, American is the small fry among US carriers at Narita, with just 70 weekly flights in comparison to Delta’s 330, United’s 150 and Continental’s 80. Despite this, AA has great marketing in Japan and their brand is fairly well-known here. Their saving grace is an extensive partnership with JAL through the oneworld airline alliance: JAL sells tickets on AA transpacific and US domestic flights, while AA sells tickets on JAL transpacific, Asian and Japan domestic flights. The carriers also cooperate with each other’s mileage programs, so that one can get JAL miles by flying AA, and vice versa.

AA has been doing fairly well lately, at least as far as US “legacy” airlines go. It just raised a cool billion dollars by selling frequent flyer miles to Citibank, which will, in turn, be dishing out more and more AA miles to credit card holders in the future. It also has more efficient planes trickling in to replace older MD-80 models in its US domestic fleet, which will improve its overall fuel efficiency and make it more competitive with the likes of Southwest and JetBlue.

JAL, on the other hand, is a financial disaster. Its “equal merger” with Japan Air System, which was supposed to make it more competitive in the domestic market, ended up creating two tracks of unionized employees, aircraft and operational infrastructure within the company, and this dichotomy has still not been sorted out. JAL still has a smattering of international routes that it doesn’t really need, most of which date back to the postwar economic explosion when the government basically tried to get JAL to fly everywhere in the world, on top of the extensive ex-JAS network within Japan that generally doesn’t mesh with the international network at all. On top of that, it has a huge, disorganized and fuel-hungry fleet of planes, and no money to swap them all out for a more streamlined fleet. JAL today looks a lot like Pan Am did in the 80s, and we all know what happened to Pan Am.

The Ministry of Land, Infrastructure and Transport has been pressing JAL to tie up with Delta for a few months now, according to media reports. Its reasoning is that the two carriers can code share, fill each other’s empty seats and tacitly cede certain markets to each other’s flight operations, much as JAL and American do now. Since Delta has many more routes from Narita, and significant overlap with JAL’s route network, turning the two competitors into allies would help JAL’s finances and justify some level of public funding to keep them afloat. Or at least, that was MLIT’s reasoning as of Taro Aso’s last day in power: New Transport Minister Seiji Maehara is being mum about the situation and implying that the Development Bank of Japan and private financial institutions may be on their own in financing a turnaround plan.

Delta has its own initiative to throw money on the table, and Delta’s interest basically explains American’s interest. I’ll let Cranky Flier, one of my favorite aviation bloggers, explain:

My guess is that [Delta’s Asian routes out of Narita] absolutely suck wind right now. If Delta is really losing a ton of money as I suspect, they could eliminate all those routes and either use the slots to fly to the US or transfer them to JAL. The additional connectivity in Tokyo that they could gain from this link-up would add a bunch more traffic to feed all that US-Tokyo flying Delta does now. (You people in Portland could breathe a sigh of relief, because this could probably help that flight come off the edge of the cliff.)

This move could make a big, immediate difference on the bottom line. If Delta can pour some money in but get it back out very quickly in the form of improved profits, then it’s a no-brainer. …

Of course, if JAL leaves, oneworld loses, so American has now come back with its plan to invest in JAL.

To this, I would only add that although Delta has inherited Northwest’s excellent sales and operational staff in Tokyo, Delta has not been making much effort to publicize its acquisition of Northwest here, except through a few ads here and there that are apparently direct translations of the ads they use in the US. This indicates to me that they are not particularly interested in developing their brand in Japan, despite the fact that it is now their most important overseas market. It’s much easier, from Delta’s perspective, to let JAL sell seats out of Japan under its own brand.

Some analysts and reporters have also raised the topic of Haneda slots, with very little clarification as to why Delta would care about Tokyo’s downtown, mostly-domestic airport. As many MFT readers know already, the Japanese government is slowly making Haneda more international. They are building a new international terminal and have started the legal documentation necessary to allow nonstop service from Haneda to Southeast Asia, Europe and other new destinations, primarily during late-night and early-morning hours when Narita is closed. The United States is not on the table yet, but many observers believe that an “open skies” treaty to open the aviation market between Japan and the US is long overdue, and with that treaty would come the ability to serve Haneda from the US. The most interesting aspect of Haneda for trans-pac flyers is that it will be open 24 hours, potentially allowing early morning or late-night flights between Tokyo and the West Coast that wouldn’t eat up a working day on either side of the ocean. Delta and American should both have an interest in such a service, especially if they can be assured of good domestic feed within Japan out of Haneda, which JAL is best positioned to provide.

It won’t be an easy ride, though. Whoever bails out JAL will have to sort through their mess of operational issues in order to get some return on the investment.

10 years on: Coming to Japan

This year marks the tenth anniversary of my first journey to Japan, as a Rotary Youth Exchange student going to school and generally getting in trouble in Osaka.

Since then, I have flown a hundred thousand miles, earned three diplomas, and have seen my Japanese high school closed down and stupidly renamed while my American high school gets shuttered due to the swine flu.

I still have many memories of that first year, and for the next eleven months, will be sharing some of those memories here on the blog. (Those of you who don’t care can simply avoid the jump, and Adamu will still regale you with tales of the Adachi-ku ballot). Continue reading 10 years on: Coming to Japan