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POLITICS

Government support for JAL creates friction in airline industry

  • 2016-02-03 15:00:00
  • , Yomiuri
  • Translation

(Yomiuri: February 3, 2016 – p. 7)

 

 The Enterprise Turnaround Initiative Corporation of Japan (ETIC; now the Regional Economy Vitalization Corporation of Japan) began providing support to Japan Airlines Corporation (JAL) in 2010.

 

 JAL gained broad support including funds from ETIC, financing from the Development Bank of Japan (DBJ), and reduction of corporate tax. As a result of eliminating loss-making flights, JAL is now competitive with ANA Holdings Inc., which places All Nippon Airways Co. under its wing.

 

 ANA has reacted sharply, noting, “JAL has received too much preferential treatment,” engaging in criticism of JAL, in whose reconstruction the Liberal Democratic Party was involved. In 2012, the Ministry of Land, Infrastructure, Transport and Tourism issued documents stipulating a policy limiting JAL’s new investments and establishing new routes until fiscal 2016. The ministry gave more consideration to JAL than ANA when allocating slots for international flights at Haneda Airport.

 

 ANA Holdings President Shinya Katanozaka welcomed the Japan Fair Trade Commission guideline proposal stipulating that the impact on competitive conditions should be minimized, telling the press on Feb. 2, “The guideline is even more specific. I expect fair aviation administration.”

 

 Meanwhile, Katanozaka said: “We will call for leveling the playing field from now on,” noting JAL enjoys an advantage in terms of profits and other areas over other airlines. He also called for equal allocations of slots at Haneda Airport. The governments of Japan and the United States have discussed the allocation of slots at Haneda for American airlines. Katanozaka said: “I want to see appropriate allocations.”

 

 The government’s support for JAL has created friction in the aviation industry and the repercussions are still being felt.

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