JAL: No plans yet to reinstate air service to NMI

Two and a half years after suspending its regular air service to the Commonwealth, Japan Airlines still has no plans to reinstate the route, citing the destination’s continued unprofitability.

According to JAL public relation manager Stephen Pearlman in an e-mail to the Saipan Tribune, the company’s main goal right now is to maintain profitability in the face of rising operational costs.

“The overriding goal of our airline group is to build a robust management framework, a business structure which can produce profits even in the face of factors such as rising fuel costs or slowing demand. With this in mind, over the past years, we have been restructuring our international passenger operations, rebuilding our network by reallocating resources to high-profit, high-growth routes; whilst suspending low profit scheduled routes,” Pearlman said.

As a result of this restructuring, JAL’s daily scheduled flights between Tokyo and Saipan and Osaka and Saipan were both suspended in October 2005.

Pearlman pointed out that other routes serving mainly leisure destinations were also affected by the restructuring; some were suspended and the flight frequency of others were reduced.

While the restoration of regular air service is still out of the question, Pearlman said that JAL continues to serve the CNMI market via charter flights, which totaled 19 in fiscal year 2007 ending March 31, 2008.

“We still serve Saipan instead by using charter flights at times in the year when demand is high. It makes more economic sense for us to do this than to operate a scheduled year-round service which is under-performing,” he said.

The JAL executive emphasized that the CNMI was not alone when the carrier decided to suspend scheduled flights to Saipan as many international flights also got the axe because of the general underperformance of JAL’s international business.

“[It was] purely business reasons. JAL’s international business has not been profitable for a number of years,” he said.

Pearlman went on to detail the extent of losses the carrier incurred the past several years—¥30 billion in FY2004, ¥47.2 billion in FY2005, and ¥16.2 billion in FY2006.

He added that, although JAL is forecasted to record a ¥7-billion profit for FY2007, the carrier still has a long way to go before resuming some of the international flights it suspended in October 2005.

“…Even if we hit this [¥7-billion profit] there is still some way for us to go in terms of restructuring our business,” said Pearlman.

JAL has three charter flights originating from Haneda bound for Saipan this Golden Week. The first one left last April 26, with the second set to fly to the CNMI yesterday, April 29. The third is scheduled to depart Japan on May 3. Each plane will be a 372-seat Boeing 747 aircraft.